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Startup accelerator is the latest investment firm to warn the good times may be coming to an end for startups and the venture market.

鈥淣o one can predict how bad the economy will get, but things don鈥檛 look good, ” YC wrote in a letter sent to its portfolio founders this week titled 鈥淓conomic Downturn.鈥� The contents of the letter were by .

鈥淭he safe move is to plan for the worst,鈥� the accelerator wrote.

The letter comes just a week after announced it would become much more selective in investments after it announced a loss of $27.7 billion on investments in its for its just-ended fiscal year.

Earlier this year, emerged that large crossover firms such as and also were pulling back on late-stage investments.

The venture market has already shown some softness, falling quarter to quarter for the first time in Q1 2022.

The slowdown in the private market is undoubtedly a reflection of the beating many public tech stocks including and have taken in the public market. Such drops can make it harder for VCs to raise money from LPs, as well as lead some large growth firms to deploy their money in the public market instead of the private in search of bargains.

Added to the falling market are the ongoing issues with inflation, interest rates and geopolitical unease that have all made ventrue dollars harder to come by.

Y Combinator鈥檚 warning likely will resound in the startup community. The firm invests in hundreds of companies a year, and its portfolio is a who鈥檚 who of startup success stories such as and .

The letter, while admitting no one can predict the future, paints a bleak year ahead. It warns founders that 鈥渋t鈥檚 your responsibility to ensure your company will survive if you cannot raise money for the next 24 months.鈥�

It goes on to say 鈥渋f your plan is to raise money in the next 6 to 12 months, you might be raising at the peak of the downturn.鈥�

In a ominous post script of the letter, the firm doubles down on its warnings: 鈥淚f for whatever reason you don鈥檛 think this message applies to your company or you are going to need someone to tell you this in person to believe it 鈥� please reassess your beliefs on a monthly basis to make sure you don鈥檛 drive your company off a cliff.鈥�

Related reading

• Tech Layoffs And Hiring Freezes Appear To Accelerate
• North American Startup Investment Fell 11% In Q1 In First Quarterly Decline In Nearly 2 Years
• Softbank To Become More Selective In Investing In Another Sign The Good Times Are Over

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