Footnotes on Sequoia’s startup memo

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Sequoia takes things seriously. The storied venture firm is known to react to macro-economic events with grand memos aimed at portfolio companies, and sometimes the entrepreneurship scene at large. Most recently, Sequoia created a 52-slide deck, first reported by The Information, titled Adapting to Endure; the document reads like a follow-up course to its infamously ill-timed “Coronavirus: The Black Swan of 2020” memo of March 2020.

The firm is not always right in its prognostications — which is maybe why it stuck to internal musings instead of a Medium post this time — but it does do a service in providing a snapshot of how one of the most weathered, and successful, firms of all time thinks about a looming downturn.

“Our intention in gathering today is not to be a beacon of gloom,” the deck reads. “But we also believe that winning in the years ahead is going to depend on making hard, decisive choices confronting uncomfortable challenges that may have been masked during the exuberance and distortions of free capital over the past two years.”

Sequoia’s advice largely followed the same script that other venture firms have been using: extend runway, focus on sustainable growth and recognize that an economic recovery may be a ways away. There were, however, some tidbits that stood out, such as a subtweet I’m guessing is for Tiger Global and a precise explanation of how founders should define fluff these days.

For my full take on this topic, read my TechCrunch+ column, “Sequoia is the latest VC firm that wants you to take the downturn seriously.” In the rest of this newsletter, we’ll bring in a founder’s perspective on this moment in tech, a pitch deck teardown and a deal that may have flown under your radar this week. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter or subscribing to my blog.

Let’s have a Heart to Heart

On Equity this week, Heart to Heart CEO Josh Ogundu joined us to talk about his perspective on the market for early-stage founders. Ogundu told us what he’s rethinking, the importance of honesty and what to do before considering a layoff. It’s not too often that we have guests on the show, so when we do, you know it’s going to be a good one.

Here’s why it’s important: So much of the advice, as this newsletter’s intro shows, has come from investors. Yet, founders are the ones living the change and making the hard decisions, so consider this episode an overdue reality check.

A ping-pong match between bulls and bears

Image Credits: Bryce Durbin/TechCrunch

Pitch Deck Teardown

Our own Haje Jan Kamps has started a weekly series in which he reviews a startup’s pitch deck in the shape of a witty column. Most recently, he reviewed Lumigo’s Series A pitch deck that helped the startup land a $29 million round.

Here’s why it’s important, in his words: “I’ve been coaching startups for a long time, and the No. 1 challenge we always run into is that there’s no shortage of advice for how to do a good pitch deck (hell, I wrote a book about it), but the thing that’s always been missing is a good library of actual, real pitch decks that were successful in raising money. When I rejoined TechCrunch and started talking to founders about fundraising rounds, I realized this might be my chance. In this week’s teardown, we talk about what worked about the deck and where the company could have made further improvements. This is info that isn’t available anywhere else, and it’s been such a fun project so far!”

Deal of the week

It certainly feels like layoff announcements are the new funding round stories, but I do think it’s helpful to balance the doom and gloom with some growth-focused news. And no, I’m not just talking about new crypto funds. This week, Planet FWD announced that it has secured $10 million so the consumer products industry can track carbon emissions. No biggie.

Here’s why it’s important via reporter Christine Hall: “Time is of the essence in reducing emissions, with [CEO Julia Collins] noting that there are less than 100 months left to reach the 2030 global goal of cutting at least 40% of greenhouse gas emissions from 1990 levels. Household consumption of things like food, which impacts land, energy and water, account for 60% of global emissions, she added.”

Image Credits: Peter Dazeley (opens in a new window) / Getty Images

Across the week

Announcing the TechCrunch+ Stage Agenda at Disrupt 2022
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Big shout out to these wonderful colleagues who I have the honor of working with. Follow all of them, and then create another account, and follow them again. I’m only half kidding.

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4 investors discuss the US cannabis market’s prospects in Q3 2022

Manish Maheshwari, former Twitter India head, leaves new startup

Founder alleges that YC-backed fintech startup is ‘copy-and-pasting’ its business

Everything you wanted to know about Elon Musk and Twitter (but didn’t want to ask)

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Questions arise on Y Combinator’s role in startup correction

Sequoia’s Jess Lee explains how VCs think about their deals

Perhaps faster delivery times were a poor choice from a unit-economics perspective

Dear Sophie: Does International Entrepreneur Parole have any advantages over an O-1 visa?

Can recurring revenue financing drive growth in a turbulent market?