Fears of an economic recession are spreading, and venture capitalists and startup founders in Greater Boston are already waving good-bye to times of wildly high valuations and relatively easy access to capital. The downturn follows two years of startups earning record-breaking amounts of venture capital.
To help make sense of this volatile environment, BostInno spoke with three Boston venture capitalists who invest in early-stage companies. The venture capitalists shared the advice they are providing to portfolio companies about how to handle fundraising, layoffs and leadership in the months ahead.
Adrian and Senofer Mendoza, co-founders of the fintech AI and cybersecurity venture fund Mendoza Ventures, invest heavily in startups led by immigrants, people of color and women. The firm is considered the first Latinx-owned venture fund on the East Coast.
Adrian said he is concerned that as venture capitalists and angel investors get scared by the worsening market, they will invest less in diverse founders.
“When you look at founders of color and female founders, they’re going to be perceived as risk because they’re not the white guy from Stanford,” Mendoza said.
Mendoza said a worsening economic state could also prevent more founders of color or female founders from leaving their day job to join or start a startup, or to enter into the field of venture capital.
“Being Latino, it’s culturally risky to go out on your own,” Mendoza said. “I think as this goes on, the nontraditional communities, the underrepresented communities are going to get hit by most of this.”
