Sequoia: it's very bad
October 14, 2008
Silicon Valley's most successful VC Sequoia Capital called an emergency meeting for its portfolio companies and is bringing back messages it sent to entrepreneurs in 2000. Sequoia partners presented a long analysis of how the United States economy got to this point. It is not a "normal crisis," they warned, and it will take a long time to emerge from it. They reminded entrepreneurs that tech spending depends on the economy and that e-commerce and advertising are already deteriorating.
They made sure that entrepreneurs understand the new realities they face, like smaller fund-raising rounds, customers that are slow to sign on to new services, fewer acquisitions for smaller sums and a very long road to an initial public offering of stock. They repeated their advice to start-ups: cut costs, get profitable and "spend every dollar as if it were your last." They said it would be the survival of the quickest â€” as in, the quickest to slash expenses.