San Francisco, Venture capital firm Backstage Capital has downsized its staff as it struggles to grow in these challenging times.

The company is now down to three people from the earlier 12, managing partner and founder Arlan Hamilton said during a podcast on Sunday.

The layoff came after Backstage Capital narrowed its investment strategy to only participate in follow-on rounds of existing portfolios, reports TechCrunch.

"It's not that I feel like there's any sort of failure on the fund side, on the firm's side, on Backstage's side, it's that this could have been avoided if systems were different, if the system we work within were different," Hamilton said during the podcast.

She said that "there will be people who take this negatively or will take this as us not being active, and it is anything but".

The changes have "taken a toll; it's been a depressing, deflating time."

However, Hamilton said that she still plans to grow Backstage's assets under management to over $100 million, according to the report.

Los Angeles-based Backstage Capital has invested in nearly 200 companies led by underrepresented founders.

As VC money disappears amid economic slowdown, tech startups have laid off over 20,000 employees the world over since April, while more than 10,000 employees have lost jobs at the Indian startups led by edtech platforms.