Navigating the current economic landscape is no easy feat for startup leadership teams. Beyond strategizing for growth, they must also maintain employee morale and confidence, a task made even more challenging by limited resources and an evolving market environment. Even though markets are showing signs of recovery, traditional growth models are becoming outdated. For the first time in years, venture-backed startups and investors are seeing net-negative headcounts. Most companies are focused on survival rather than rapid expansion, with compensation and equity remaining stagnant. Meanwhile, salaries for new managers and VPs have declined, further signaling a shift in priorities.
A New Approach: From Growth at All Costs to Sustainable Scaling
The emphasis in today’s startup ecosystem has pivoted from hyper-growth to long-term sustainability and strategic planning. A key, often underutilized resource in this shift is the role of venture investors and their platform teams. Historically, VC firms have prioritized funding, leadership recruitment, and aggressive scaling. However, an increasing number of investors now recognize the need for deeper partnerships that help founders build resilient teams and company cultures.
I have spent years as a head of people at multiple startups, helping teams grow from their early days to companies of several hundred employees. Through firsthand experience, I understand the challenges founders face as they scale their businesses. This insight led me to transition into venture capital, where I now work with multiple early-stage startups, helping them avoid common pitfalls and build strong teams.
The Power of Pattern Recognition in Startup Success
Everything startup founders experience—market shifts, leadership hurdles, cultural transformations—we’ve seen before. With exposure to a vast range of companies, investors develop pattern recognition, identifying both the common mistakes and the best practices that drive success.
One founder recently approached us for help in backfilling a key leadership position. On the surface, this seemed like a simple recruitment task. However, after analyzing the company’s organizational structure and challenges, we advised against hiring a direct replacement. Instead, we suggested bringing in a consultant to meet short-term needs while enabling internal team members to develop into leadership roles. This approach not only saved costs but also fostered a more adaptable and resilient internal team.
More Than Just Capital: Investors as Connectors
Venture investors bring more than financial backing. They also act as connectors, uniting leaders across their portfolio companies. Every quarter, we bring together HR and people leaders from the companies we’ve invested in to share insights, resources, and strategies.
One of the most impactful discussions we’ve had recently focused on investing in mid-level managers. These individuals play a critical role in daily operations, yet their professional development is often overlooked. One company shared a successful strategy—a 12-month leadership academy—that had strengthened its management pipeline while keeping senior executives from being burdened with day-to-day operational concerns.
During challenging times, investors can also play a key role in reinforcing company confidence. I recall a time when, after a difficult quarter, employees at one of our startups felt uncertain about the company’s future. A board member stepped in during an all-hands meeting to share their perspective and explain why they remained confident in the company’s direction. This simple intervention led to a measurable improvement in employee sentiment by the following quarter.
Investors today are more than financial supporters; they are strategic partners offering expertise, connections, and industry insights. They help founders make critical cultural and operational decisions, ensuring companies remain agile in both the short and long term.
The current market doesn’t just demand growth—it demands resilience, adaptability, and a strategic approach to resource allocation. In this new startup landscape, VCs could be one of the most valuable yet underutilized assets for leadership teams looking to scale effectively and sustainably.
