State of startups survey: 33%+ of founders worry about the end of a tech bubble, 65% say 2020 fundraising will be hard, and diversity and mental health are key
concerns are at a 4-year high. Over two-thirds of founders who shared an opinion think we're in a bubble for tech companies, up 12% from 2018 and 25% from 2017. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/tQ3ieDdsFb Laurie Voss / @seldo : Diversity and Inclusion as a retention issue: at companies where employees feel leadership is not prioritizing D&I, employees are 3x more likely to plan to leave in the next 12 months (34% vs. 11%). https://stateofstartups2019.firstround. com/ @dhh : No wonder so many startups are toxic shitshows. More founders sleep 6 hours or less than do 8 hours or more. And more work 80+ hours per week than 40 or less. https://stateofstartups2019.firstround. com/ https://twitter.com/... David Booth / @david__booth : Couldn't agree more. Anyone can now learn to (no)code, anywhere in the world. But getting that initial buy-in from a network of well connected, committed early adopters and advocates is hard. cc @beondeck https://twitter.com/... Ashok Kamal / @ak_launchleader : The 2019 State of Startups is here and notable trends include looming fundraising challenges, the importance of inclusive teams, mental health support and flex work for employees https://stateofstartups2019.firstround. com/ via @firstround LetitiaGreen Mba Med / @vaactiveangels : For #startups , #founders, and #angelinvestors, here's the state of startup world. Via @Techmeme and @firstround https://twitter.com/... Ryan Hoover / @rrhoover : RT'ing to signal my worth (But seriously, community can be a serious competitive advantage, especially for non-obvious markets) https://twitter.com/... Henrik Berggren / @henrikberggren : My #1 advice to other founders these days is: Get. A. Therapist. https://twitter.com/... Brian McCullough / @brianmcc : Yeah, but aside from the diversity and mental health stuff (good! progress!) if you asked founders any time in the last 20 years if they were worried about a bubble and access to capital, wouldn't they have said the same thing? https://www.techmeme.com/... First Round / @firstround : 10/ Community is the new moat. Nearly 80% of founders reported building a community of users as important to their business, with 28% describing it as their moat and critical to their success. https://stateofstartups2019.firstround. com/ ... https://twitter.com/... First Round / @firstround : 9/ Mental health matters—but there's a gap in who's accessing it. Female founders were 3x more likely to report enlisting a therapist or psychiatrist compared to their male counterparts. There was a similar divide in founders under/over the age of 40. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/VQX1Pzwrt5 First Round / @firstround : 2/ Founders anticipate rockier fundraising roads in 2020. 65% believe capital will be harder to raise and 70% predict the balance of power will shift towards investors. (Their answers were more optimistic in 2018's survey at 44% and 46%, respectively.) https://stateofstartups2019.firstround. com/ ... pic.twitter.com/MJ5PhsOInn First Round / @firstround : 3/ Gender bias in hiring is bad, and in fundraising it's worse. 40% of female employees reported that their gender hurt their chances of getting hired or landing senior roles. 70% of female founders felt their gender hurt their ability to fundraise. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/6nMJltgjSF First Round / @firstround : 7/ Founders question the upside of working from home, but employees are on board. Only 15% of founders said that working remotely makes their team more productive. But employees were nearly 3x more likely to say that WFH gave them a productivity boost. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/OsIr096AJc First Round / @firstround : 5/ Half of founders don't trust Glassdoor reviews—but employees do. Only 53% of founders described their reviews as accurate. Employees were far more likely to agree with what they read—80% of them felt their company's reviews were a true reflection. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/Gw9sixqIeY First Round / @firstround : 4/ Not prioritizing diversity? Employees will show themselves out. Employees who believe their leadership isn't prioritizing diversity and inclusion are 3x as likely to anticipate leaving their company within the next year. https://stateofstartups2019.firstround. com/ ... pic.twitter.com/PfzKgLhwCz Steven Cohn / @spcohn : “1 in 10 employees said compensation was a primary reason they joined their company...Ability to make an impact (55%), the problems they'd be solving (42%), the mission (40%), the team (39%) and the culture (30%).” @firstround State of Startups Survey: http://stateofstartups2019.firstround.c om Sally Shin / @sallyshin : 👀this and more from First Round Capital https://stateofstartups2019.firstround. com/ https://twitter.com/... Jay Yarow / @jyarow : Eek https://twitter.com/... Jay Yarow / @jyarow : https://twitter.com/...
Context & Ripple Effects
First Round's annual State of Startups survey lands with bubble sentiment at a four-year high — over two-thirds of founders who shared an opinion say tech is a bubble, up 12 points from 2018 and 25 from 2017 — and 65% expect 2020 fundraising to get harder. That pessimism sits oddly against the record the decade's IPO class later showed: the most valuable startups raised half as much capital as the most funded ones, suggesting founders' anxiety about cheap money was already pointing at something real.
The survey also quantifies two frictions that had been covered anecdotally: founder mental health, echoing mid-2019 reporting on executives wrestling with anxiety, insomnia, and depression, and workplace culture, where Laurie Voss highlighted that employees at companies whose leadership deprioritizes D&I are three times likelier to plan an exit within a year.
First-order effects
- Founders heading into 2020 fundraises face a self-fulfilling headwind — 65% expect capital to tighten, and 70% of female founders already report their gender hurt their ability to raise.
- Companies where leadership isn't visibly prioritizing diversity face an immediate retention tax: 34% of employees at those firms plan to leave within 12 months versus 11% elsewhere.
Second-order effects
- If the feared tightening arrives, capital-efficient models gain ground — the lane OATV's Indie.vc occupied with modest $100K–$1M checks for sustainable startups rather than blitzscale rounds.
- Culture becomes a recruiting-and-funding variable investors price directly, foreshadowing the workplace politics fights at Coinbase and Expensify where founders' cultural stances carried business consequences.
Third-order effects
- A sustained shift from growth-at-all-costs to capital discipline would re-sort the venture market toward fewer, better-capitalized winners — consistent with the IPO evidence that value concentrated among startups that raised less.
- D&I and mental health move from perks to structural economics: retention gaps and founder burnout become measurable inputs to who survives a downturn, pushing boards and investors to treat them as diligence items.
The trend: Startup sentiment is cycling from cheap-money optimism toward bubble anxiety and capital discipline, with culture and founder wellbeing emerging as measurable determinants of which companies endure.