As global start-ups scramble to cope with the sharp reversal after 13 years of bull market, y combinator, a silicon valley ace, advised the founders of its portfolio to "prepare for the worst" The investment company - whose early support included investments in Dropbox, coinbase, airbnb and reddit - this week recommended that start-ups cut spending and focus on extending their runways over the next 30 days.
For those companies that do not have a runway to "live to the default value", YC strongly recommends that they consider raising funds.
"If your plan is to raise funds in the next 6-12 months, you may raise funds at the peak of the economic downturn. Remember, even if your company performs well, your chances of success are extremely low. We suggest you change your plan," YC wrote in the letter entitled "economic downturn".
YC's statement, which supports hundreds of young start-ups every year, represents a signal that the splitting of the market has greatly reduced the value of a large number of technology companies, including giants such as Shopify and Netflix, which are penetrating into the field of early-stage start-ups in recent weeks.
The letter also reads: "PS: if for some reason you think this information is not applicable to your company, or you need someone to tell you in person to believe it... Please reassess your beliefs every month to make sure you won't drive your company off the cliff. Also, remember that you can contact your group partner at any time.