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The rules of work and capital are being rewritten in real time.
Across the U.S., venture funding remains 40% below 2021 highs, according to PitchBook’s Q3 data. The era of “growth at all costs” has collapsed, 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.
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, while tech job growth in the state is up 4.2% year-over-year (Arizona Commerce Authority). 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—Luigi Cusano, Aaron Favreau, Art from Club Req, and Nicole Zeno of What the Frac Podcast—offer a composite portrait of what “smart” looks like now.
“Most founders I know aren’t choosing to build lean,” says Art (Club Req). “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 the ones who find product-market fit, sales traction, and operational rhythm before hiring a full team. They use tools, automation, and temporary collaborations to mimic scale until revenue or capital catches up.
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.”
That means three things:
In other words, hiring isn’t just an operational choice anymore — it’s a capital 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 fractional CFO or supporting roles at the early stage. But side hustles make me concerned. Founders and core teams should be all in.”
“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 this market, investors don’t want growth; they want grip. The capital now flows to founders who show traction through execution — and who treat talent as an extension of financial runway.
As one VC recently quipped: “In today’s economy, the best fundraising strategy might be a better hiring plan.”
Nicole Zeno, founder of What the Frac podcast, has watched fractional work evolve from a survival tactic to a strategic advantage. What began as a stopgap for cost-conscious startups is now a new operating system for modern work.
Hybrid, fractional, and project-based teams are no longer “alternative.” They’re standard. But Zeno adds a crucial caveat:
“Fractional only works 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.”
The rise of fractional leadership has also changed the calculus for founders and talent alike. Executives can now lend expertise across multiple companies, while startups gain access to world-class talent without the full-time burn. But the equilibrium only holds when the mission, not the contract, is what binds the team together.
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—solving for today while investing in tomorrow—is how Arizona will lead.
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.
They’re not waiting for the market to recover. They’re building the future of work, right now, in real time.
“The founders who thrive in 2025 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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