Fifty-six slides, packed with a huge amount of information about the economy – mostly negative. The message is, essentially, “batten down the hatches”. Spend less, keep as much money in the bank as possible. Basically, if you’re not cashflow positive yet, you’re VC-funded, and you have less than a year’s worth of cash in the bank, you’re screwed.
This is not a good time to go to investors for money, no matter how good your financials are, no matter how many companies are lining up to buy your product. If I was an investor with a few million dollars in my pocket, I wouldn’t be putting too much money in speculative investments right now – they would have to be very very sure things. That means real customers; real cashflow and real products.
I’ve seen this happen before, on a smaller scale. The last time around, it was just pretend Internet money, and the damage was mostly contained to the technology sector (and AOL bought Time-Warner. That still makes me laugh). This time around, it’s pretend mortgage money, and the damage is much more widespread.
The thing about Sequoia is they were on the front lines of the last bust – arguably, they helped create it. One would hope they’ve learnt from it, and this advice they’re giving this time around is sound advice, based on what they learnt last time around.