If you want a job at one of the hottest American startups, chances are it’s going to be an on-location gig.
However, if it is a software company whose output is fully digital, then the likelihood of remote working increases.
Those were the findings of our latest survey of recruiting practices among the top-funded US startups this year. The results showed that remote hiring is the norm among software companies in the best seed stage. But for the most funded companies across all industries and stages, most are on-site or hybrid work environments.
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The breakdown is fairly similar to what we see in workplaces across industries, noted Nicholas Bloom, an economics professor at Stanford who tracks work-from-home trends.
“It’s definitely the case that technology is vastly more in WFH than other industries,” Bloom told Crunchbase News. An important reason, of course, is that many tech jobs can be done very easily remotely, which is not the case for manufacturing or retail, for example. Furthermore, Bloom notes, “Tech also seems really open to change, and WFH is new and different and they’ve embraced this faster.”
Highest Funding Recipients Are Not Very Remote
The latest data dives into remote work trends at funded startups, revealing a split in hiring trends that correlates with industry and business stage.
As we noted in a February survey, about half of the most funded U.S. startups required all or most employees to be on site. Unsurprisingly, the biggest determinant of whether a business is remote or location-based appears to be whether it needs physical infrastructure beyond computers and cellphones.
When we updated the list, the findings were similar. We sampled job openings from the top 20 venture capital recipients of 2022 and found that, again, about half were wholly or predominantly on-site employers. This includes Elon Musk’s The Boring Company, AI research company Anthropic, and biomanufacturing unicorn Resilience.
Again, not very shocking. Obviously you can’t drill complex networks of underground tunnels or exploit a million square feet of bioproduction space while you’re at home in your pajamas clicking on a laptop.
Funding recipients with only digital output, meanwhile, leaned on the distance. This was the case, for example, with ConsenSys, a developer of technology for building applications on the Ethereum blockchain, and Yuga Labs, known for Bored Ape Yacht Club NFT.
WFH rules when starting up newer software
Meanwhile, among younger software-focused companies these days, it seems that remote working is the norm.
In an effort to demonstrate this, we’ve compiled a list of US software companies 1 that raised $10 million or more in seed capital this year. We then looked at which part of the companies listed vacancies as remote or remote-first.
It turned out that the vast majority of companies on this list of published job openings were explicitly remote. Of course, they all have some geographic headquarters. But few expect employees to actually go there.
Zora, an NFT platform that raised $50 million this spring, is a prime example. Per securities filing is headquartered in California. But on the recruiting page, the company says, “Our headquarters is the Internet and we have employees all over the world.”
Bennie, an employee benefits startup that raised $33 million in January, is another example. Although the company has offices in Connecticut and downtown Manhattan, the team is completely remote across the country.
It’s a sharp shift from the archetypal pre-COVID startup image, with lavish in-office snacks and large industrial-chic workspaces. However, the dominance of remote work among younger software startups seems to indicate that it is an upward trend that is likely to continue.
Even companies that support hot startups are getting involved. This month, Silicon Valley’s Andreessen Horowitz became the latest VC to embrace the remote way, announcing that: “a16z is moving to the cloud.” The company says its headquarters will now be “in the cloud,” although partners will create physical offices worldwide.
So start-up staffers stay at home. Is this a good thing?
At the moment there is no discussion about whether you can scale a startup without a physical headquarters. The uncertain question is whether this is the optimal approach.
For Bloom, there is clearly lower overheads for a remote workforce and it helps cast a wider net for hiring. On the other hand, he said, “It seems harder to innovate when you work remotely. It’s harder to mentor and it’s harder to build a corporate culture.”
Chon Tang, founder of the UC Berkeley SkyDeck Fund, agrees with this idea. Working with new founding teams, the fund has guided both in-person and outside groups when the pandemic has required it. According to Tang, the level of camaraderie and cooperation in the personal groups is almost incomparably higher than in the remote groups.
“Tasks that are very well designed from point A to B that are prone to remoteness,” Tang said. “But for creating early stage startups, the serendipity is the right conversation with the right person at the right time.”
Illustration: Dom Guzman
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