How a sluggish finance market could change Utah tech culture - Axios Salt Lake CityLog InLog InAxios Salt Lake City is an Axios company.

How a sluggish finance market could change Utah tech culture

Illustration: Maura Losch/Axios At the this weekend, I had a chance to speak onstage with Vanta CEO Christina Cacioppo. The California-based company creates tools to automate security and privacy compliance for other startups. State of play: We talked about how this year's sluggish tech financing could affect the culture of the tech industry.That got me thinking about whether Utah's tech sector could change, too. What's happening: It's been really hard for tech startups to get financing in 2022 — a slowdown that experts say could last a while.With fewer investors kicking in less money, the ones who do are requiring more proof that their money won't be wasted. Why it matters: That's a big change from just a year ago — and from the industry norms for the last couple of decades, when tech investors were more focused on the promise of future revenue growth. That contributed to the tech industry's reputation for extravagance; if a startup spent beyond its means early on, it was a sign of confidence, while cautious bean-counting might even come off as pessimistic. That also helped to create a race for flashy benefits to recruit and retain employees; Cacioppo recalled a private chef serving her three meals a day at a previous job. The latest: Tech investors are now asking for startups' "burn rates" — that is, how much money they have to spend for one dollar of revenue, Cacioppo said.The new pressure to control costs could be painful for a lot of startups.But it also could make the industry more straightforward about proving value, and less susceptible to empty spectacle. Between the lines: The shift to work from home already has reduced a lot of in-office expenses, but now investors are expecting even more efficiency.Startups may also need to reconsider lavish retreats and copious swag.Recruiting may focus more on direct compensation and whether an employee likes the product and the work itself, rather than luxury perks. Zoom in: Utah is a bit different from California, and companies may not face as acute a change in the investment climate, said Clint Betts, CEO of Silicon Slopes.Utah startups in earlier stages are appealing to venture capitalists who don't expect investments to pay off for a decade or so anyway. What they're saying: "Based on the types of tech companies built here, Utah may be a bit more insulated from the current funding environment," Betts told Axios. What's next: Utah startups still need to prepare for a slowdown, which Betts said means developing "a laser focus on productivity, revenue and talent management." Get more local stories in your inbox with .Subscribe Support local journalism by becoming a member.

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