Business incubator Y Combinator will reduce staff and investment in late-stage startups by 20%. The accelerator stressed that the decision had nothing to do with the bankruptcy of Silicon Valley Bank, whose clients made up 30% of YC startups, writes TechCrunch.
Y Combinator CEO Harry Tan said late-stage investments have become “a distraction from the core mission” of the accelerator: early-stage investments.
As a result, the company has already laid off 17 employees. Harry Tan emphasized that all the changes in the strategy for further development were developed before the collapse of SVB.
Harry Tan compared the bank’s failure to the extinction of many small start-ups. This event will set innovation back at least 10 years. “All the small start-ups, the Google and Facebook of tomorrow*, will be destroyed if we don’t find a solution.” wrote It’s on Twitter.
He also launched a petition, now signed by more than 5,000 tech executives and founders, asking Congress to step in and support the business community.
- In March 2023, Silicon Valley Bank went bankrupt in the US. The 16th largest bank in the US ($200 billion) has funded Silicon Valley startups. 89% of deposits totaling $175 billion were uninsured. Most of the bank’s clients are start-ups that have received financing from venture capitalists (the bank has helped finance more than 30,000 start-ups).
*belong to Meta, recognized as an extremist in the Russian Federation and included in the list of terrorists.
Author:
karina pardaeva
Source: RB
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