Sequoia Capital’s Doomsday Meeting with its Companies

October 9th, 2008 at 12:00 am
 


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The big question on every web company’s mind when the Lehman Brothers filed for bankruptcy and started the whole economic crisis we are currently in is, will the fire on Wall Street reach Silicon Valley? The question is quite dumb and would be better paraphrased with ‘when’ instead of ‘if’ or ‘will it ever’.

It is already here. Web 2.0 the rebirth of the web after the bubble burst in 2000 is going to die. Actually, according to some it’s already dead. Anyway, there aren’t startups folding up yet or public companies going under. So will the Web 2.0 bubble burst? Again it’s a matter of when.

One of the surest signs that the current web industry will be facing another collapse like the events of 2000, is that the elders have spoken. Yesterday, Sequoia Capital, Silicon Valley’s most prestigious Venture Capital firm, held an emergency meeting with its portfolio companies and discussed ways to get through the economic crunch.

Companies were told to cut costs at all costs. Sequoia has been through the first bubble burst and lost a lot with companies like WebVan and eToys. This time around they are taking the necessary precautions with their investments.

According to sources, the meeting lasted several hours. It wasn’t just one of those meet and greet events. Sequoia was dead serious and methodical on where and how to cut costs. They’ve been relying on statistical data to show their current portfolio in which areas they can save money and cut costs.

Sequoia is arguably the best mind to consider when it comes to the bubble burst. However, they do have the best track record of highs and lows so I guess they really know what they are talking about. If they say a storm is coming, it would be best for companies to buckle down, shut the windows and wait ’til it bowls over.