Business Insider – Y Combinator pulls back from late-stage startup investing to focus on its core accelerator program, and parts ways with 17 employees

Y Combinator pulls back from late-stage startup investing to focus on its core accelerator program, and parts ways with 17 employees
2023-03-13Y Combinator decided to refocus after finding that late-stage investing was a “distraction” from its core mission, Tan wrote in a blog post.

Garry Tan, founding and managing partner at Initialized Capital, posing in a hallway
Y Combinator president and CEO Garry Tan.

Oliver Covrett

  • Y Combinator president Garry Tan announced the accelerator is moving away from late-stage investing.
  • The decision shouldn’t lead to “a noticable effect” on companies YC has already funded, Tan says. 
  • The startup accelerator will also eliminate 17 roles on the late-stage investing team. 

The startup accelerator Y Combinator is pulling back from its late-stage startup investing efforts, its president Garry Tan announced in a blog post.

Known for its early-stage investing focus through its core accelerator program, YC also does 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,” Tan wrote. 

As part of the restructuring, 17 employees on the late-stage investing teams had their roles eliminated, Tan wrote in the post. 

The partners who led the fund, Anu Hariharan and Ali Rowghani, plan to leave the accelerator, with plans to set up a fund of their own since YC won’t be raising another late-stage fund, The Information reported. 

Tan took over as Y Combinator’s president and CEO at the beginning of 2023 after previous president Geoff Ralston announced he was stepping back. Prior to that, he spent over a decade at Initialized Capital, the venture firm he cofounded alongside Alexis Ohanian. He also went through YC’s accelerator program as a startup founder in 2008 with his blogging platform Posterous, and later went on to serve as a YC partner from 2010 to 2015. 

The announcement that Tan would lead the accelerator came after news broke that YC would be decreasing the number of accepted startups for its accelerator program by around 40%, The Information first reported in August, ahead of its demo day last September. 

Y Combinator did not immediately respond to Insider’s request for comment. 

Read the original article on Business Insider

https://www.businessinsider.com/y-combinator-pulls-back-late-stage-startup-investing-2023-3

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