Y Combinator advisors urge founders to plan for the worst
The investment firm advises founders to fight for the scraps
The investment firm tells founders to slash costs in the coming month
An economic downturn has left investors scrambling
Company founders received a letter warning them that the worst is on the way
As businesses around the world try to manage a steep downturn following a 13-year bull run, Y Combinator (YC), a Silicon Valley kingmaker, is telling founders to ‘prepare for the worst.’
This week, the investment firm, whose early investments include Dropbox, Coinbase, Airbnb, and Reddit, advised firms to slash costs and focus on lengthening runways within the next 30 days. Those who don’t have enough time to ‘reach default alive’ may consider soliciting funds, according to YC.
In the letter marked ‘Economic Downturn,’ the firm recommended that they adjust their strategy.
The message from YC, which invests in hundreds of young firms each year, is an indication that the market rout that has reduced the value of a large number of digital companies in recent weeks, including giants like Shopify and Netflix, is now affecting the early-stage startup sector.
