How hard did VC funding fall off in 2023?

I used effect and affect in the same blog. Ask me anything.

How hard did VC funding fall off in 2023? And how did that affect recruiting?

Some stats:

👉In dollars: VC investment down by 45.6% Q1 to Q3 2023 vs 2022 (here)

👉In deal volume: VC deals down 31% Q3 2023 vs 2022 (here)

Less VC investments mean less hiring. And “easier” hiring. (If that sounds familiar, I hit on it a couple weeks ago, here.)

What a lot of people misunderstand: the drop in funding doesn’t just impact startups. It touches the entire hiring market because all companies recruiting for tech, sales, marketing, etc., dip into the same labor pool.

When VC funding was through the roof, companies had to hire twice as many internal recruiters to fill the same number of tech roles. It was harder (and took more time & effort) to attract the same number of people. (Side note: both of those groups cost more than they do now.)

As funding dropped, the effect on hiring was compounded by the need to preserve capital. Those who are getting funding aren’t hiring as much, because they need to maintain runway.

No one knows if/when they’ll get additional funding. So they need to make it last.

tldr: Funding does not automatically mean ramped up hiring like it used to.

James Hornick

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.