Many Silicon Valley companies have been wondering how — or if — the larger economic crisis may affect them. This is perhaps the surest sign yet that there’s no “if.” It comes at a time when Ron Conway, Silicon Valley’s most prominent angel investors, sent a similar warning to his own companies. Conway was burned badly by the last downturn, and it took him years to claw out of it.
[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":98860,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"business,","session":"B"}']“It was scary,” one Sequoia-backed chief executive told us about the Sequoia meeting, attended by scores of his peers. It lasted several hours, and the message was bleak. The speakers and presentation were to be kept confidential. Things could get a lot worse than people think, and it will be a “more protracted downturn,” Sequoia partners told its companies. “They were not fear-mongering,” one chief executive told us. “They were smart speakers. Sequoia runs on specifics, they’re very data driven.”
Startups are being told to cut expenses, and somehow survive a downturn that the firm thinks may last years. This wasn’t just general advice — presenting partners went through various components of company operations and specified how to cut.
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Sequoia held a similar meeting when the last Silicon Valley bubble burst, as GigaOm’s Om Malik points out.
Sequoia’s recent investments include companies like Loopt and Admob, both of which took home prizes for top companies at our MobileBeat event. We’ve written about dozens of others in these pages, including Dropbox, Funny or Die, Meebo, Plaxo, RockYou, Aricent and Trulia. (Full list of Sequoia companies is here).
We’ve reached out to the firm for comment and will update with more information as we get it.
Matt Marshall contributed to this story.
[Sequoia image via the U.S. Forest Service]
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