Tough love from Sequoia Capital

Sequoia Capital hosted a big meeting with their portfolio companies a few days ago. Today someone posted what he says are the slides of their presentation. It’s an analysis of the trends that got us into this financial mess, and some brutal recommendations to startup companies: Sequoia Capital on startups and the economic downturn.

Om Malik at GigOM posted more details about meeting today. He says general Partner Doug Leone advised startups:

  • Unprofitable companies would have a tough time raising cash, so get cash-flow positive as soon as possible.
  • 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