Why Now’s the Perfect Time to Join an Early-Stage Startup

Hannah Young
Hannah Young
.
January 6, 2023
3 min
 read

If you’ve been following startup news recently (or really any tech news, for that matter), then you’ve seen the brutal layoffs happening at all kinds of companies. From prominent startups to big tech corporations, tech workers are being laid off en masse because of “the market.” This begs the question: why on Earth would I join a super-risky, early-stage company?

First, let’s dive into what we mean by an “early-stage startup.” “Startup” is a broad term that can encompass anything from 2 friends in their garage to an 8,000-employee corporation that processes billions of dollars in payments daily. When we say “early-stage startup,” we mean Seed (like Crosswire), Series A, and Series B companies. These are comparatively small companies, with 5–200 employees, and they are still trying to figure out how to be a business. Some are further along than others, but we’re all babies in the grand scheme.

Looking back to the Financial Crisis of 2007–2008, we saw tiny startups begin and develop. These small startups were the likes of Uber (2009), Airbnb (2008), and Okta (2009): all gigantic corporations now. We’re not going to claim that every company started in a time of hardship will become a billion-dollar business; startups are still risky. However, there is evidence that times of economic downturn form the environments in which great companies flourish (diamonds are created under pressure, April showers bring May flowers, etc.).

Startups are often described as early businesses that diagnose a problem and aim to solve it (e.g., Crosswire diagnosing the problem of excessive time spent granting and auditing permissions for employees and aiming to solve it via our product/access engine that automates provisions access and identifies anomalies), and recessions bring no shortage of problems. Part of the benefit of this environment is lower starting costs. In periods of economic stagnation, initial costs that normally plague an early-stage startup — like renting an office space, purchasing tech, and registering your business — naturally go down. Additionally, startups have longer time horizons than other investments. So, while the average recession lasts 10–18 months, it takes three years on average to move from the seed stage to Series B (not even including an additional year and a half to move from a Series B to a Series C company).

Another significant aspect of startup culture is funding. While we’re seeing growth-round companies (Series C, Series D, and beyond) struggle to raise subsequent capital, Seeds and Series As remain healthy. Venture capitalists still need to deploy their capital, even if they do so more slowly and with more discretion, making private investments less affected by general market conditions than traditional investments like the stock market.

So if you’re looking for the right time to join a high-risk, high-reward venture, we’d argue that there’s never been a better opportunity. We’re not saying the only option is to jump ship to the nearest startup, but in times like these, it’s imprudent to overlook the Davids building up their strength to tackle the impending Goliath. To tackle Goliath with Crosswire, explore our career opportunities here and stay updated with our latest news by following our blog below!

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