RIP Good Times
Sequoia Capital · 2008
"The 2008 crash is structural, not cyclical; cut burn, extend runway, get to cash-flow positive."
In 2008, Sequoia Capital summoned its founders for a brutal presentation titled 'RIP Good Times'. They warned that the financial crisis would completely choke off venture funding, and startups needed to immediately slash cash burn to survive.
The presentation highlighted how macroeconomic shocks cascade down to early-stage startups. When public markets crash, limited partners (LPs) stop giving money to venture capitalists. VCs, in turn, stop funding startups. Sequoia demanded its founders get to 'default alive'—meaning they needed to reach profitability using only the cash they currently had in the bank, because assuming they could raise another round in the next 18 months was suicidal.
What did Sequoia mean by telling founders they must become 'default alive'?
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The explanation above is written with AI assistance. These are the originals — go to them to check it.
- RIP Good Times (Sequoia Capital, 2008)Sequoia Capital
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