Y Combinator, a startup accelerator has announced a major change in its startup investment operations. The startup accelerator is winding down its late – stage startup funding and investment. This means YC will no longer raise continuity funds for mature private tech companies.
This development is connected to the Silicon Valley Bank’s collapse and has cost about 20% of YC employees their jobs.
In a blogpost, Garry Tan, CEO of Y Combinator said the firm is largely focused on early stage investing and is finding late – stage investing to be a distraction from its core mission.
“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,” he wrote.
Tan pointed out that as a result of this development, some roles in the late-stage investing team will no longer be needed. He also confirmed that 17 team mates were affected by this change.
On how this change would affect alumni YC backed startups, Tan adds, “there shouldn’t be any noticeable effect on the companies we’ve funded or on the way we interact with alumni, but if any companies or alumni have questions, I’m here and the YC group partners are here — as always, to help you make something people want.”
It is reported that Anu Hariharan and Ali Rowghani, the partners who led YC’s continuity funds team will be leaving the firm to set up their own fund.
According to TechCrunch, YC has said that the Silicon Valley Bank’s failure was not a factor in the layoffs and that they have been strategizing on this change well before the collapse.
