YC advises founders to ‘plan for the worst’ amid market teardown https://techcrunch.com/2022/05/19/yc-advises-founders-to-plan-for-the-worst/

yup, we also had all hands meeting today to discuss on similar topic. It is going to be tough for startups to raise money

Is there a way to find the runway for startups unless we have insider information? This might help the employees to prepare for the worst 🙂

Good companies are transparent about it. We have everything documented in Notion. Spendings/runway/funding details etc

What does a market 'downturn' mean exactly and how do they quantify it?

Why are the predicting dry capital streams ? Waht's their alpha? Does anyone know why are banks and Twitter talking about a looming recession ?

@damp-city-91224 it's mostly market shock due to Fed and RBI increasing interest rates (I think other governments are doing so too). This has caused debt to become expensive for startups and funds that relied on it to furnish capital for their running costs. Couple that with poor IPO performances and capital loss of large VCs, funding has dried out and the “startup bubble” has popped. However, big companies are also affected due to this, everyone was spending money like crazy on new horizons cough Meta cough.

Interest rates up -> Money printing machine goes brrrrrrrrr. Crypto bros will rejoice party parrot

Disclaimer: it's my opinion, I am not an economist. Minimum necessary background: Interest rates were already low to recover from 2008 and other economic decisions/problems. Govts flushed the market with printed money in 2020 to handle imminent deleveraging, LP absorbed bulk of it causing the market (public and private) to soar instead of stay flat or gentle decline. i.e. govts overcompensated too soon, money didn't reach the right hands etc. As a result, inflation ensued. Now, they're trying to control inflation by increasing interest rates.

That link about how the economic machine works is going to be so helpful, and also yes, this are going really bad. In europe we are experience 25-30% price bump in normal super market goods. Not to create panic but it’s just that the investor sentiment seems to be very low and the startup bubbles will start bursting 😬

I feel this might be the best time to start one though: • Lower competition • Less folks have the ability to race to bottom • VCs for once actually asking you to make a solid business plan • Customers unwilling to pay for something unless it's actually useful. • Hiring is easier as even the bigger players will slow down. Make one now and you're almost guaranteed death or PMF over the course of the year. IMO, both of those outcomes are much better than the slow-coast to death most startups find themselves in.