Across furtive videocons, junior VCs wait for the layoffs to begin

Amid post-YC Demo Day discussions and online “coffee” catchups, there is a lingering sense of dread among VCs — particularly junior VCs — about their own job security. Over the past few days, I have heard rumors — and they are just rumors, for now — about three recognizable venture firms and how they are…

Across furtive videocons, junior VCs wait for the layoffs to begin

Amid post-YC Demo Day discussions and online “coffee” catchups, there is a lingering sense of dread among VCs — particularly junior VCs — about their own job security.
Over the past few days, I have heard rumors — and they are just rumors, for now — about three recognizable venture firms and how they are beginning to rethink staffing in the year ahead amidst the novel coronavirus pandemic. Two of those firms are in active discussion about potential exits with specific individuals, while another is nearing a decision to eliminate seven investors at the associate, principal and venture partner levels due to massive declines in their own predicted returns.
We are actively reporting this; feel free to reach out to me or other staffers at TechCrunch if you have tips here.
Nonetheless, it seems almost inevitable that an industry that has massively expanded its partnerships and junior staffs in the bull market of the past few years would suddenly need to rethink the exorbitant costs of all that salary overhead.
There are a couple of considerations here based on what I have been told by VCs. The first is that the pace of investing will slow down, allowing investors more time to do due diligence, plan and use their staffs more effectively, thus requiring fewer folks to do sourcing, analysis and customer calls.
Let me give three examples of the kind of speed we saw before and how that is changing today.
Take the news that Sequoia let go of its investment in Finix a little while back. We had heard that one of the causes for why the firm seemed to accidentally invest in a direct competitor to one of its most valuable portfolio companies, Stripe, is that the deal got done so quickly (I heard 48-72 hours from someone in a position to know, but let’s say a week or two) that there was limited time for diligence or even I guess competitive mapping
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