Y Combinator Warns Startup Founders of Economic Downturn: ‘Plan For The Worst’

Startup accelerator Y Combinator is the latest investment firm to warn the good times may be coming to an end for startups and the venture market.

“No one can predict how bad the economy will get, but things don’t look good, ” YC wrote in a letter sent to its portfolio founders this week titled “Economic Downturn.” The contents of the letter were first reported by TechCrunch.

“The safe move is to plan for the worst,” the accelerator wrote.

The letter comes just a week after SoftBank announced it would become much more selective in investments after it announced a loss of $27.7 billion on investments in its Vision Fund for its just-ended fiscal year.

Earlier this year, reports emerged that large crossover firms such as Tiger Global and D1 Capital also were pulling back on late-stage investments.

The venture market has already shown some softness, falling quarter to quarter for the first time in Q1 2022.

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