Adam Hardej

May 26, 2022·Newsletter

Sequoia Warns Founders

Sequoia Warns Founders

On Monday the 16th, Sequoia's leadership shared a presentation entitled "Adapting to Endure" with 250 founders. This is not their first time sharing this type of presentation. They shared a 56-slide survival guide to the Great Recession, entitled "R.I.P. Good Times." In early 2020, they shared a memo entitled "Coronavirus: The Black Swan of 2020."
In their most recent presentation, the biggest names at Sequoia broke down how they see the future and what founders need to do to survive. Below I'll do my best to pull out some key points:

  • Capital was free. Now it's expensive.
    • Companies that can adapt to deal with this will survive and win. The cheap money crossover funds are too hurt in public markets to come save the day.
  • Nasdaq is down bad, but not '01 / '08 bad. Things are scarier one layer down.
    • Mega-caps are making this look better than it is. 61% of tech stocks are trading below pre-pandemic prices. 29% are trading below COVID lows.
  • The recovery will be long. Adapt swiftly or perish.
    • Making incremental changes is a great way to not make it. The time is now to be decisive and make the hard decisions needed to survive long-term.
  • Crisis is opportunity. Do not fear. Get focused and win.
    • The companies that prepare will survive and win. If it doesn't deal with one of these, it's fluff: Drives revenue growth, Saves money, Reduces risk.

It's a scary time to be a founder, but isn't it always? Here at Stonks, we're excited to keep pushing forward and we know the founders we support are too.

Click here to check out the full presentation for yourself.

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