Y Combinator has reportedly warned founders to act quickly to trim costs in the face of what looks like the end of a 13-year run-up in funding and valuations.
The influential Bay Area startup accelerator's recommendation came in a memo reported by TechCrunch on Thursday.
"No one can predict how bad the economy will get, but things don’t look good," YC said in its memo.
The Mountain View-based accelerator program invests in hundreds of startup each year and has become much more like a venture firm since it was founded in Cambridge, Mass., in 2005. It has operated for most of its existence in the boom period that followed the 2008-2009 recession, backing unicorns that include Airbnb and Stripe. But it drew in its memo on what it learned from that experience.
Such economic downturns "often become huge opportunities for the founders who quickly change their mindset, plan ahead and make sure their company survives," YC told its founders. But it advised 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," the accelerator recommended.
