Sequoia's Startup Advice: Save Cash, Slash Costs, Stay Alive

Om Malik hits up his sources and gets more detail on who said what at Sequoia’s “Holy S**t” meeting earlier this week. He now has summaries of presentations from four of the firm’s VCs. Do you work for or with a Sequoia-funded company? Best be on your toes.

UPDATE: Thanks to our reader “JoeInsider” for providing even more detailed notes, in the comments below. And now, via VentureBeat’s Eric Eldon, here’s the slides from the presentation:

 

Sequoia Capital on startups and the economic downturn

View SlideShare presentation or Upload your own. (tags: depression recession) Mike Moritz: His message to companies was don’t worry about getting ahead, instead, “We’re talking survive. Get this point into your heads.” He warned that companies need to be cash-flow positive, and if they are not, then they need to get there now, because raising capital without being cash-flow positive is going to be tough.

Eric Upin: Het old the room that we are in the beginning of a long cycle, what he called a “secular bear market.” This could be a 15-year problem, he said. Advice:

* Cut spending. Cut fat. Preserve capital.
* Throw out the models and spreadsheets, because all assumptions will be wrong.
* Focus on quality.
* Reduce risk.

Michael Beckwith: Cuts in spending will accelerate in the fourth quarter and the first quarter of 2009, and pointed to eBay as an example.

Doug Leone: This downturn is a different animal and one from which it will take “years to recover.” Advice:

* Start with zero-based budgeting.
* Cutting deeper is the formula to survive, and this is an era of survival of the quickest.
* Make sure you have one year’s worth of cash.
* If you have a product, reduce expenses around it and boost sales. If the product is ready, cut the number of engineers.
* Focus on building the absolutely essential features in your product.
* Be brutal when it comes to marketing — anything that isn’t working, cut it.
* Don’t burn through your cash, for cash is king.
* Cut base salaries on sales people and leverage them with upside.
* Most importantly, be true to yourself.

See Also: Sorry Startups. Party’s Over

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