Sequoia Capital Warns Startups of Coronavirus ‘Black Swan’ Event
- VC firm advises companies to cut costs and conserve cash
- Email draws parallels to one sent during recession in 2008
Photographer: Michael Nagle/Bloomberg
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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.