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The rules of work and capital are being rewritten in real time.
Across the U.S., venture funding has receded significantly from its 2021 highs.
The era of “growth at all costs” is over, replaced by one of creative constraint. For founders, that means a shift from abundance to precision, a world where every hire, every dollar, and every hour must compound in value.
And yet, amid the pullback, Arizona’s innovation economy is quietly accelerating. Local funds like AZ-VC and Tesoro VC are fueling early-stage momentum, and the state’s tech workforce continues to expand year-over-year. The message is clear: capital may be tight, but opportunity is not.
As Daniela Santangelo, founder of Freeway Phx, puts it, “Founders can’t outspend their way to growth anymore. They have to outsmart their way there.”
At the intersection of talent and capital, four voices offer a composite portrait of what “smart” looks like now. Luigi Cusano, Principal Consultant at Agilitas, LLC, Aaron Favreau, Director of Venture Madness and Partner at Spark Angels, Art Fields, Founder & CEO at Club Req, and Nicole Zeno, Fractional Executive and Co-Host of the What the Frac? Podcast, each highlights a piece of the new playbook for founders.
At the intersection of talent and capital, four voices offer a composite portrait of what “smart” looks like now.
“Most founders I know aren’t choosing to build lean,” says Art Fields. “They’re forced to. The real play becomes how to simulate scale when you can’t afford the hires.”
Art’s insight cuts to the core of the new founder mindset: leverage first, labor second. The winners of this cycle won’t be those who scale the fastest, but those who learn to do more with less and make it look effortless.
That leverage comes not from bloating a team, but from clarity and systems. The founders who thrive are those who find product-market fit, sales traction, and an operational rhythm before hiring a full team. They use tools, automation, and temporary collaborations to mimic scale until revenue or capital catches up.
For example, rather than immediately adding headcount, a resourceful founder might automate routine tasks, outsource a short-term project to a specialist, or turn early customers into a community that helps spread the word. The goal is to simulate scale and to deliver outsized results with a skeletal crew until the company’s growth can justify more hires.
For Luigi Cusano, who advises growth-stage companies on operational strategy, this moment demands a total mindset shift.
“Founders can’t out-spend their way to success. They must out-smart their way there. The winning strategy is to treat talent as your most precious form of capital, allocating it with the discipline of a venture capitalist.”
He breaks this strategy down into three core principles:
In other words, hiring isn’t just an operational choice anymore; it’s a capital strategy. Talent has to be managed with the same discipline as cash flow. The takeaway for founders: treat your team plan with the scrutiny and intentionality of an investor—because in a tight market, your hiring strategy is your survival strategy.
When Aaron Favreau, investor at AZ Venture Capital, evaluates startups, he’s not scanning for headcount; he’s scanning for focus.
“When I look at a company, I want to see the core team—CEO, product, sales—as full-time. I’m fine with a fractional CFO or supporting roles at the early stage. But side hustles make me concerned. Founders and core teams should be all in.”
Favreau’s point is clear: commitment matters. If a founder or key team member is only partially involved, juggling a startup as a side project, it’s a red flag. He wants to see the essential roles all-in and laser-focused. In his view, the CEO, the product lead, and the head of sales (the people driving the vision and revenue) need to be 100% dedicated. Other functions can be part-time or fractional in the early days, but the core team must signal conviction by being fully committed.
Favreau also emphasizes that simply adding people isn’t a solution to startup challenges.
“Strategic hiring outperforms bloated teams. It’s easy to stay busy, but driving key metrics is what I look for. Every new role should have clear outcomes. Just hiring someone isn’t the solution.”
In other words, it’s not about how many people are on the team, but who is doing what. It’s easy for a growing team to fill their days with meetings and tasks, but investors like Favreau care about results. Is each team member moving the needle? Every hire should have a measurable impact on a key metric or milestone; if not, that hire might not be justified at all.
In today’s market, investors don’t just want to see growth for growth’s sake; they want grip. They want tangible traction and disciplined execution. The capital now flows to founders who show they can turn small teams into mighty ones, squeezing more progress out of each dollar and each hire.
As one VC recently commented: “In today’s economy, the best fundraising strategy might be a better hiring plan.”
In other words, a founder who allocates talent wisely is ultimately more fundable than one who merely burns cash to inflate headcount.
Nicole Zeno, Fractional Executive and Co-Host of the What the Frac? Podcast has watched fractional work evolve from a survival tactic into a strategic advantage. What began a few years ago as a stopgap for cost-conscious startups is now becoming the standard operating model for modern companies.
Hybrid, fractional, and project-based teams are no longer “alternative” approaches, but rather, they’re mainstream.
“The playbook on how to make money and grow your business has been thrown out the window,” Zeno adds, “As a voice in the fractional landscape, I am not advocating that you no longer build internal teams, but rather that your hiring plan is a puzzle of fractional, full-time, advisors, partners, and service providers.”
A startup’s "team" might now consist of a handful of full-time employees supported by several part-time specialists or contractors scattered across the globe, welcoming a truly global ecosystem. This setup allows founders to tap world-class expertise on demand, without the full-time payroll burn.
But Zeno adds a crucial caveat: “Your fractional executives should be giving you some much-needed outside eyes and recommendations, but the difference between a fractional and a consultant is that they become fully integrated into the team. Hybrid teams only work when communication is intentional. You can’t outsource culture. Founders who build rituals, clarity, and shared accountability — regardless of how someone’s paid or where they sit — are the ones who sustain momentum.”
In short, you can hire fractional talent, but you can’t have fractional commitment. Even if a team member is only working 10 hours a week, they need to feel 100% included. Founders must deliberately foster communication and culture so that every contributor, whether they are full-time or fractional, in-office or remote, is plugged into the mission. That means setting up intentional check-ins, clear documentation, shared goals, and cultural rituals that everyone participates in.
The rise of fractional leadership has undoubtedly changed the calculus for founders and for talent alike. Seasoned executives can now lend their expertise to multiple companies at once, and startups can access high-level skills (like a CFO, CMO, or CTO) without bringing them on full-time. It’s a win-win on paper: the startup saves money and gets experience, the executive gains flexibility and wider impact.
However, this equilibrium holds only when the mission (not the contract) binds the team together. If your fractional team members feel like mercenaries, you’ll get mercenary effort. If they feel like true partners in the vision, you’ll get passion and performance. The founders who succeed with this model are those who over-communicate, build trust across every boundary, and never let “fractional” become an excuse for someone to operate in a silo.
Culture remains king, no matter how unconventional your org chart looks.
The throughline across all these perspectives is unmistakable: precision beats speed, clarity beats chaos, and culture beats capital.
Arizona’s ecosystem, with its collaborative ethos and practical roots, is uniquely suited to this new era. The state’s workforce is adaptable and diverse. Its founders are builders, not speculators. And its investors are increasingly focused on substance over spectacle.
As Luigi Cusano puts it, “Winning here requires a two-part playbook. First, use fractional and project-based talent to solve immediate business problems with capital precision. Second, have the courage to play the long game: build your own talent pipeline through Arizona’s colleges, workforce programs, and local accelerators.”
This dual mindset of solving for today while investing in tomorrow is how Arizona will lead. It plays to the region’s strengths: tackle short-term challenges with creative, lean tactics, while simultaneously cultivating homegrown talent for sustainable long-term growth. In Arizona, founders understand that you can be scrappy and visionary at the same time.
Indeed, a significant recalibration is underway in the startup world, and Arizona is seizing the moment. Unlike the go-go markets that rode the last boom-and-bust, Arizona’s tech community has been steadily building on fundamentals: real revenue, strong teams, and an environment of collaboration. That foundation is now paying off. As capital gets more discerning, Arizona’s no-nonsense approach becomes a competitive advantage. The message to founders and investors alike is clear: in this state, smart beats big, and doing it right beats doing it recklessly.
We’re entering a decade defined not by who can raise the most, but by who can retain the best. The founders who will thrive are those who see every hire as an investment, every system as leverage, and every partnership as shared capital.
In essence, talent has become the new capital, and the savviest founders act like fund managers of human potential – investing in the right people and watching that investment multiply.
They’re not waiting for the market to recover. They’re building the future of work, right now, in real time. And many of the boldest experiments and successes are happening here and now – often in places like Arizona, where community and creativity intersect.
“The founders who thrive in 2026 will be those who master the art of assembling and unleashing the right people at the right time.”
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Where talent meets capital and community
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