Y Combinator to shut late-stage investment fund, lay off employees

Famed Silicon Valley startup accelerator Y Combinator (YC) introduced on Tuesday that it’s going to wind down its late-stage funding fund. YC stated in a weblog publish that late-stage funding was totally different from early stage and was turning into a distraction from what the accelerator aimed to do.

“YC is rightly known for early-stage investing. In recent years, we have also done some late-stage investing. But late-stage investing turned out to be so different from early stage that we found it to be a distraction from our core mission. So we’re going to decrease the amount of late-stage investing we do,” Garry Tan, president & CEO, YC, wrote in a weblog publish.

Tech publication The Information reported that Anu Hariharan and Ali Rowghani, who ran YC’s Continuity Fund, will go away to begin their very own fund.

Further, Tan additionally knowledgeable within the weblog publish that the shutting down would impression 17 staff on the agency whose roles will not be wanted.

“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. As we make this change in strategy, we want to acknowledge and express our appreciation for their substantial contributions,” he stated.

Tan clarified within the publish that this improvement won’t have a noticeable impression on the businesses it has funded or the best way they work together with alumni.

Silicon Valley Bank disaster

ET reported on March 12 that not less than 40 YC-backed Indian startups had $250,000 to $1 million in deposits with SVB, whereas greater than 20 of them have deposits of greater than $1 million. YC has backed greater than 200 startups in India, together with Razorpay, Zepto, and Meesho, amongst others.

Tan had written to the US regulators, together with treasury secretary Janet Yellen, searching for aid and a spotlight over the collapse of Silicon Valley Bank (SVB), which led to deposits of tons of of startups banking with the California-based lender getting frozen final week.

Underscoring the significance of the SVB meltdown, he had stated in a collection of tweets that the collapse of SVB was an “extinction-level event” for startups on condition that impediments in making payrolls may result in “mass furlough”.

The petition was signed by over 3,500 CEOs and founders. The signatories embody virtually two dozen startups with a base in India.

YC has been an early investor in corporations like Stripe, Airbnb, and others. Its portfolio corporations work intently with the SVB.

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