Clearbanc, theinformationsuperhighway has learned that a Toronto-based company that funds startups through equity-free investments has fired 17 people to help tackle COVID-19's long-term economic impact.
The cuts affect around 8% of employees and relate to roles that range from office managers and recruiters to sales. Co-founder Michele Romanow The company will use its connections to help those affected by the layoffs find other jobs and offer enhanced benefits through the end of the business quarter.
Clearbanc was noisy on its way to a venture capital alternative for startups. Just last week, Clearbanc announced a new financing product that would help start-ups avoid downsizing and operationally stay afloat: Clearbanc Runway. And last year it released its “20-minute term sheet” to sell share-free capital with the promise of entrepreneurial friendliness. The model saw that the startup has so far paid $ 1 billion to almost 2,200 companies.
In July 2019, the fintech company raised a fund of $ 250 million and equity of $ 50 million to expand its investment objectives. The co-founders say Clearbanc continues to see increased demand for its capital. Last year alone, more than 140 employees were hired.
Clearbanc is in a unique position during this downturn, as it primarily funds e-commerce companies, which have increased in use as brick-and-mortar stores are less likely due to social distance.
However, last week, co-founder Andrew D’Souza pointed out unpredictable market conditions: "There is a lot of volatility and a lot of uncertainty," he said.
"We will certainly be more conservative than we were six months ago. It looks like we will be issuing smaller checks more often," he told theinformationsuperhighway last week.
Today's layoffs don't directly affect Clearbanc's ability to shorten checks, the company says. Instead, the Clearbanc cuts signal that layoffs are not reserved for when the dry powder runs out. As the pandemic shows, we are learning that it is sometimes a little more preventive.
A storm of layoffs has hit a variety of startups and industries around the world. While travel and hospitality companies are clearly feeling the economic impact of the pandemic, broader cuts show that sales and recruitment teams from other industries are also vulnerable. Layoffs were so pervasive that platforms have risen to help layoffs find their next appearance. And at a time of insecurity week after week, any effort to create meeting places for those with this hard shared experience is very welcome.