(Pitchbook) Last month, Y Combinator made a decision that would have been considered an investment heresy during the boom market. The accelerator, which helped incubate some of the strongest VC-backed businesses created over the last 15 years, including Airbnb, DoorDash and Stripe, said it’s pulling back from doubling down on its breakout portfolio companies when they reach the late stage.
Y Combinator began backing its best-performing mature startups in 2015 when it raised its first $700 million continuity fund. That strategy, which other firms refer to as opportunity or select funds, became popular with many early-stage VCs in the middle of the last decade. It proliferated through the pandemic years as company valuations grew and it became harder to maintain ownership in companies that had a shot at massive exits.
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