(Bloomberg) — Sequoia Capital, one of the world’s leading venture capital firms and a periodic soothsayer for the industry, sent an email to its entrepreneurs Thursday warning that the coronavirus could usher in a prolonged global economic slowdown and fundamentally alter the business environment.
The editorial, titled “Coronavirus: The Black Swan of 2020,” said companies should consider cutting costs, revising sales forecasts and conserving cash. Sequoia Capital also acknowledged that many of its companies have already reported growth rates dropping sharply between December and February. It said several are now at risk of missing their first-quarter targets.
Sequoia Capital has been a fixture of Silicon Valley for decades, helping fund generations of companies, including Apple Inc., Google, Instagram and DoorDash Inc. In 2008, the VC firm sent a similar, ominous note to founders called “RIP Good Times” during the depth of the recession. The email is still referenced in Valley circles today.
Suhail Doshi, a founder of Sequoia Capital-backed Mixpanel, described the message in a tweet as “RIP good times meets the coronavirus” and wrote: “Founders about to learn the survival skills of ‘09.”
Sequoia Capital drew parallels in the email to the economic downturns of the early and late 2000s. It could take several quarters before the virus is contained, the technology investment firm wrote: “It will take even longer for the global economy to recover its footing.”
To contact the reporter on this story: Lizette Chapman in San Francisco at [email protected]
To contact the editors responsible for this story: Mark Milian at [email protected], Robin Ajello
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