The Good Times Are Over for Startups

Venture capital firms such as Sequoia Capital and Y Combinator are sounding the alarm for startup companies that the days of raising capital easily are over.

The well-known VC sent 250 founders a 52-slide presentation via Zoom on May 16, alerting them to a “crucible moment” as higher rates of inflation, volatility in the stock market and several geopolitical issues led to less certainty in the venture capital market. The presentation was seen by The Information.

Sequoia told the startup founders that there likely will not be a “swift V-shaped recovery like we saw at the outset of the pandemic,” and instead recommended that they evaluate their companies for costs that could be slashed.

“Don’t view (cuts) as a negative, but as a way to conserve cash and run faster,” Sequoia wrote.

A behemoth in the venture capital world, Sequoia, founded in 1972, has invested successfully in tech giants such as Google ( (GOOGL) – Get Alphabet Inc. Class A Report), Apple ( (APPL) ) and Uber ( (UBER) – Get Uber Technologies, Inc. Report) and other well-known companies that are used often by consumers such as AirBnb  (ABNB) – Get Airbnb, Inc. Class A Report, Stripe, Block  (SQ) – Get Block Inc Class A Report (formerly Square), Instagram ( (FB) – Get Meta Platforms Inc. Class A Report) and WhatsApp.

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