Sequoia warns its portfolio companies
TechCrunch has Sequoia Capital’s presentation of doom, 56 slides that explain how we got into the current economic crisis, what’s happening now and in the near future, how technology spending is impacted, and what tech start-ups are going to need to do in order to survive.
TechCrunch has also linked to emails from angel investor Ron Conway, as well as Benchmark Capital, providing similar advice to start-ups. It comes down to “have cash on hand” — cut costs and raise money now, because things are not going to get better anytime soon.
I’ve heard theorizing that some of the wealthy investors pulling money out of the stock market could consider putting it in venture funds instead. But a recent Fortune article contradicts that theory: Venture firms are bracing for a cash crunch. Investors apparently want liquidity, and VC funds don’t offer that. So we’re going to be looking at a tight funding environment for a while, and that’s going to have a lot of ripple effects on the emerging cloud computing industry.
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