The honeymoon period for startup companies seems to be over. Many have begun to tighten their belts, no longer indulge in discounts, and even lay off many employees.
As quoted by us from CNBC, a warning was also given by startup investors. World economic conditions that are not fine will have a bad impact and the condition can last a long time. Even startups have the potential to be affected.
"It's going to be a long recovery and while we can't predict how long it will take, we can advise you on how to prepare and get through it," said venture firm Sequoia Capital, whose portfolio includes Google, Apple and WhatsApp.
Y Combinator, a startup incubator that has helped Airbnb, Dropbox to Stripe grow, among other things, tells startup founders that they need to understand that poor technology company market performance has a significant impact on startup investment.
Even though it's only 2021, investors are still pouring funds into startups to achieve high valuations. Now the situation is different, even for big tech companies.
Layoffs and the termination of employee recruitment seems to have become the norm. Companies such as Snap, Facebook and Uber have said they will slow down job openings.
Several startups have also cut employees, such as cloud software company Lacework. "We are adjusting our plan to raise money through profits and strengthen the balance so that it can be more opportunistic and through macroeconomic uncertainty," they said.
Tomasz Tunkuz, Managing Director at Redpoint Ventures said that many startup investors advise their startup companies to have enough cash for at least two years in order to anticipate if something bad happens.