“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 blog post.
Tech publication The Information reported that Anu Hariharan and Ali Rowghani, who ran YC’s Continuity Fund, will leave to start their own fund.
Further, Tan also informed in the blog post that the shutting down would impact 17 employees at the firm whose roles will no longer be needed.
“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 said.
Tan clarified in the post that this development will not have a noticeable impact on the companies it has funded or the way they interact with alumni.
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Silicon Valley Bank crisis
ET reported on March 12 that at least 40 YC-backed Indian startups had $250,000 to $1 million in deposits with SVB, while more than 20 of them have deposits of more than $1 million. YC has backed more than 200 startups in India, including Razorpay, Zepto, and Meesho, among others.
Tan had written to the US regulators, including treasury secretary Janet Yellen, seeking relief and attention over the collapse of Silicon Valley Bank (SVB), which led to deposits of hundreds of startups banking with the California-based lender getting frozen last week.
Underscoring the importance of the SVB meltdown, he had said in a series of tweets that the collapse of SVB was an “extinction-level event” for startups given that impediments in making payrolls could lead to “mass furlough”.
The petition was signed by over 3,500 CEOs and founders. The signatories include almost two dozen startups with a base in India.
YC has been an early investor in firms like Stripe, Airbnb, and others. Its portfolio firms work closely with the SVB.
