Sequoia takes issues critically. The storied enterprise agency is understood to react to macroeconomic occasions with grand memos aimed toward portfolio firms and generally the entrepreneurship scene at giant.
Most just lately, Sequoia created a 52-slide deck, first reported by The Information, titled “Adapting to Endure.” The doc reads like a follow-up course to its infamously ill-timed “Coronavirus: The Black Swan of 2020” memo of March 2020.
The agency isn’t at all times proper in its prognostications — possibly why it caught to inside musings as a substitute of a Medium submit this time — but it surely does do a service in offering a snapshot of how some of the weathered, and profitable, VC companies of all time thinks a few looming downturn.
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“Our intention in gathering right this moment is to not be a beacon of gloom,” the deck reads. “However we additionally imagine that profitable within the years forward goes to rely upon making onerous, decisive selections confronting uncomfortable challenges that will have been masked in the course of the exuberance and distortions of free capital over the previous two years.”
Sequoia’s recommendation largely adopted the identical script that different enterprise companies have been utilizing: lengthen runway, give attention to sustainable development and acknowledge that an financial restoration could also be a methods away. There have been, nevertheless, some tidbits that stood out, comparable to a subtweet that I’m guessing is supposed for Tiger World and a exact clarification of how founders ought to outline fluff today.
The capital supplier blames capital itself — capitalism, huh?
One of many clearest subtweets throughout the deck is Sequoia’s commentary on cross-over funds. The agency says that “low cost capital isn’t coming to the rescue” at this second: