According to a presentation obtained by The Information, Sequoia Capital sees a market downturn and is urging the startups in its portfolio to preserve cash.
The tech-focused venture capital fund, which has notoriously published grim market outlook notes in the past, sounded the alarm that current market conditions present acrucible moment in light of tighter monetary policy and high inflation.
When it issued a memo titled "Coronaviruses: the Black Swan of 2020", it said it saw some of the present day market turmoil.
The ability for a quick-fix policy solution is limited by inflation and conflicts. We don't believe that this is going to be another steep correction followed by an equally swift V-shaped recovery like we saw at the beginning of the Pandemic, according to the note.
quoia stressed the need for the companies in its portfolios to make difficult cuts to preserve liquidity and maintain options in the future
The presentation urged companies to look at cutting expenses. Companies should be prepared to cut in the next 30 days.
The market downturn is expected to impact consumer behavior, labour markets, supply chains and more. It will be a longer recovery and we can advise you on how to get through to the other side.
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