Sequoia is the most recent VC agency telling you to take the downturn severely

Sequoia takes issues severely. The storied enterprise agency is understood to react to macroeconomic occasions with grand memos aimed toward portfolio firms and generally the entrepreneurship scene at massive.

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 is just not all the time proper in its prognostications — perhaps why it caught to inside musings as a substitute of a Medium put up this time — nevertheless it does do a service in offering a snapshot of how one of the weathered, and profitable, VC corporations of all time thinks a couple of looming downturn.

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“Our intention in gathering as we speak 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 exhausting, decisive decisions confronting uncomfortable challenges that will have been masked through the exuberance and distortions of free capital over the previous two years.”

Sequoia’s recommendation largely adopted the identical script that different enterprise corporations 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, reminiscent of a subtweet that I’m guessing is supposed for Tiger International and a exact rationalization of how founders ought to outline fluff as of late.

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 is just not coming to the rescue” at this second:

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