Investors are preparing for a founders downturn. Or influx. Wait what? –


Sahil Lavingia of Gumroad broke into the venture world as one of the first testers of the rolling fund, an AngelList product that allows investors to raise capital on a subscription basis. That was in 2020. Fast forward to 2022 and a lot has changed.

One of those changes? The number of pitches from founders who want to increase. “Since March, it’s down about 90%,” Lavingia told “I probably saw more than most — about 20 to 40 vetted decks a week — and that number has now dropped to about two to four a week.” He has also seen the quality of talent rise for people who want to work for gum road — which he attributes in part to the steady rush of layoffs — and a decline in founders starting companies.

A decline in the number of founders raising capital suggests that startup startups are not as immune to macroeconomic shifts as some investors claim; a boom of new startups, on the other hand, would support the idea that recessions — and the associated wave of layoffs — are the time when startups are born.

“I think the total number of founders we’re going to see will be less, but the quality bar is going up.” Redpoint Director Annie Kadavy

Lavingia divides the state of founders into three buckets: “tourist founders, immigrant founders, and ‘born and raised’ founders.” Tourist founders, he said, are those who only start businesses in bull markets, a cohort he says has fallen by about 100%.

“They are rarely fundable in bear markets,” Lavingia said. “They have to hire others to build things.” Immigrant founders, meanwhile, care less about the reputation and status of starting a business, but do weigh the risk and return. This cohort of founders has halved, per Lavingia. Finally, “born and raised” founders are founders regardless of the market: “They all existed and therefore raised money in 2020-2021, so they too are not starting businesses and raising money at the same pace.”


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