For better or worse, the US officially ended its COVID-19 public health emergency policies.
That move from the federal government is only the latest change that makes 2023 wholly different from its predecessor. At the same time, for startup founders, there are banking failures but potentially more venture capital, layoffs and unexpected return-to-work policies altering the local ecosystem. That can make things difficult for founders navigating a new scene with new rules, according to local experts.
For CEO and Executive Director Jason Chen of DC’s VentureScope, which operates accelerator MACH37, the current tech startup scene in DC is one characterized by a return to in-person connections. And as people head back to the office and in-person events, Chen said that they’re also hunting for more startup opportunities.
“There’s definitely a pretty large appetite. Folks are hungry and have been craving that — especially the folks that didn’t really jump back into things about a year and a half ago,” Chen told Technical.ly. “It feels like there’s a lot of energy, momentum in the ecosystem and people are looking forward to getting back into things.”
Meanwhile, VentureScope COO Jennifer Addie said the past few years also changed the face of entrepreneurship and funding. She noted that the pandemic served as a testbed for changes in how funders and founders conducted business, and one significant difference is that both are playing their cards more openly. While investors were once very private about their investments, she sees more entities being more open to stating what they want and taking meetings with founders directly.
At the same time, she sees startup founders feeling less of a need to look poised and perfect to investors and instead asking for what they need.
“Now people realize, if we’re going to get into business together, we need to be open about this,” Addie said. “We need to be able to ask for help and not be judged, and we need to invite the community to come in and help us, make us strong.”
More recently, 2023 brought several instances of economic turmoil — especially with the failures of multiple banks, from Silicon Valley Bank to First Republic. In more immediate terms, startup founders banking with those entities had to find solutions fast. But in the longer haul, Chen sees founders looking to prevent similar incidents by diversifying their assets. Even those banking with larger, stable institutions are trying to do business with multiple regional and small banks.
While he does foresee some additional banking failures, he noted that there is still capital available for founders — even if it’s a bit more competitive than in 2021.
“There might be an element of survival of the fittest, which there always has been, but maybe it’s a little bit more hyper-survival of the fittest,” Chen said. “If you’re a good founder, good founding team, you’re solving a key pain point and you have some really good, interesting tech — and you have a good network around you — I still think you can get in front of folks.”
DC’s current tech world also features a major advantage for companies that previously didn’t exist: quick adoption. Adding another piece of tech into the mix isn’t too much of a reach for many customers and companies.
“Where before it took a long time for people to adopt the telephone or the car, now an app comes out and you’ll have millions of users in a day,” Addie said. “So they recognize that it’s possible and that inspires them to try and really just reach people and move through this quickly.”
Still, while that ability exists, Addie also thinks there’s more potential for disruption in deep tech like quantum, which requires tremendous research and development. Founders are very focused on speed, she noted, which pushed them towards emerging tech; but if they can resist that temptation, she sees a lot of potential.
“When you look at what the solutions are that we really need, that are going to be extremely disruptive, a lot of those are coming out of deep tech,” Addie said. “Those longer-term investments that a lot of people don’t want to make, it’s something that people are paying more attention to.”
Knowledge is power!
Subscribe for free today and stay up to date with news and tips you need to grow your career and connect with our vibrant tech community.