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

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

Most lately, Sequoia created a 52-slide deck, first reported by The Info, 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 all the time proper in its prognostications — possibly why it caught to inside musings as an alternative of a Medium publish this time — nevertheless it does do a service in offering a snapshot of how one of the crucial weathered, and profitable, VC companies of all time thinks a couple of looming downturn.

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“Our intention in gathering as we speak isn’t to be a beacon of gloom,” the deck reads. “However we additionally consider that profitable within the years forward goes to rely on making onerous, decisive decisions confronting uncomfortable challenges which will have been masked throughout 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: prolong runway, deal with sustainable progress and acknowledge that an financial restoration could also be a methods away. There have been, nevertheless, some tidbits that stood out, corresponding to a subtweet that I’m guessing is supposed for Tiger International and a exact rationalization of how founders ought to outline fluff nowadays.

The capital supplier blames capital itself — capitalism, huh?

One among the clearest subtweets inside 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:

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