Tips from Y Combinator and why Ca$h is the King again

The recession is starting in the states and rapidly rolling out to the rest of the world. First and foremost, it's hitting "hamsters" who are used to working for work and growing for growth, forgetting about boring cashflows, EBITDA, etc.?

Y Combinator, the legendary investment firm whose early investments include Dropbox, Coinbase, Airbnb, Reddit and many other successful projects, has advised startups to cut their spending and prepare for winter. Many will have to spend the next 6 to 12 months in survival mode. Here are the talking points named by Y Combinator:

1. No one can predict how bad the economy will be, but things are not going well.

2. the safe move is 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 spending and expand your runway over the next 30 days.

3. If you don't have the runway to get out of default alive, and your existing or new investors are willing to give you more money right now (even on the same terms as the previous round), you should seriously consider taking it.

4. Regardless of your fundraising ability, you are responsible for making sure your company survives if you can't raise the money in the next 24 months.

5. Understand, the poor performance of technology companies in the public market has a significant impact on venture capital investing. Venture capitalists will have a much harder time raising money, and their investors will expect more investment discipline.

6. If your plan is to raise money over the next 6-12 months, you may be raising money at the peak of the recession. Remember, your chances of success are extremely slim, even if your company is succeeding, we recommend you change your plan.

7. Remember that many of your competitors will not have a plan for maintaining a high burnout rate and will only find out they screwed up when they try to move up to the next round.?

8. You will be able to gain significant market share during an economic downturn by simply staying alive.

I have to admit, it's a lot more fun to launch businesses than it is to shut them down and record the losses.

The risk of recession is growing and a 20% drop in the U.S. stock market from current levels is likely if economic growth begins to slow. There are few alternatives to stocks in terms of market depth right now, and investors are parking cache in stocks; long-term, stocks will soak up inflation through revenue and earnings growth, although earnings growth will lag behind revenue at best this year, and profit margins can be expected to decline due to higher production prices. What do you think about this situation? Share your opinion in the comments.