Famed startup accelerator Y Combinator has despatched out a notice to its alumni community of startups warning them of the approaching financial downturn, and the funding penalties which will impact even one of the best startups.
The notice, reviewed by the Economic Times, mentioned, “If your plan is to lift cash within the subsequent 6-12 months, you may be elevating on the peak of the downturn. Remember that your probabilities of success are extraordinarily low even when your organization is doing nicely… We suggest you alter your plan.”
A recent plunge in tech stocks and global markets, ongoing supply chain shortages due to the pandemic, the Russia-Ukraine war, and the American Fed’s decision to increase interest rates for the first time in years in March have all contributed to a bear run in the market that many are predicting to be the next major economic downturn.
As such, investors and startup enablers such as Y Combinator have also advised that you should take any money you can at the moment, and focus on survival for the next few months.
“The safe move is to plan for the worst. If the current situation is as bad as the last two economic downturns, the best way to prepare is to cut costs and extend your runway within the next 30 days. Your goal should be to get to Default Alive,” mentioned the Y Combinator notice.