- Y Combinator will issue fewer checks to late-stage startups, resulting in the layoff of 17 team members, or roughly 20% of the accelerator’s workforce.
- “Unfortunately, this means we will no longer need some of the roles on the late-stage investing team. Seventeen of our teammates are impacted today,” Garry Tan, Y Combinator President and CEO, says.
- He also states that the company will recognise and show appreciation to the affected employees for their significant contributions as it adjusts its strategy.
Tan claims that because the accelerator primarily focuses on early-stage investing, late-stage investing is a “distraction from our core mission.”
More than 30% of Y Combinator startups receive funding from Silicon Valley Bank. However, the accelerator asserts that the bank’s failure was not a factor because the shift was planned “well before” the bank’s failure.
Tan describes the SVB meltdown as an “extinction-level event” for startups in a series of tweets, claiming that it could result in “mass furloughs” because it would be difficult to pay employees.
According to Tan, “There shouldn’t be any noticeable effect on the companies we’ve funded or the way we interact with alumni.”
In response to the collapse of Silicon Valley Bank, Y Combinator wrote a petition to US Treasury Secretary Janet Yellen and others, pleading with them to stop shockwaves that could cause a financial crisis and the layoff of more than 100,000 workers.
The YC petition to save startups and millions of jobs has received over 1,200 CEO and founder signatures, representing over 56,000 employees.