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The firm’s guidance to  startups is to assess their runway (as future financing might become challenging), reassess sales forecasts, raise return on investment for marketing spend, and assess headcount and capital spending. All business fundamentals need to be looked at once again.

The most striking statement in the post is: “In downturns, revenue and cash levels always fall faster than expenses.”

For startups dependent on venture cash to grow, belt tightening to extend the runway–provided you are not too late and raising this quarter–might make sense. In Crunchbase data, we have not yet seen funding slow down. However, funding rounds announced recently were closed in the past couple of months, with conversations and diligence stretching back to a very different funding climate.

In October 2008 Sequoia’s “RIP Good Times” described by TechCrunch’s Michael Arrington as a ” the message was dire with “cuts are a must” and “Get Real or Go Home”.

In the 2008 RIP report, Sequoia claimed the following:

New Realities

• $15 million raised at $100 million post is gone
• Series B/C will be smaller
• Customer uptake will be slower
• Cuts are a must

Need to become cash flow positive

• Increased challenges
• M&A will decrease
• Prices will decrease
• Acquiring entities will favor profitable companies
• IPOs will continue to decrease and take longer

Saying “cuts are a must” might be interpreted as sounding cruel.

In the middle of a health crisis, where people in nonessential industries are mandated to stay home, and with heavy job losses predicted for the travel, hotel and retail industries, getting a new job will be more difficult.

Some jobs are opening up, however. just announced it is hiring to up to 100,000 new full- and part-time workers in delivery and fulfillment centers to address the crisis.

Investors are aware that in the last downturn, new companies–formed in 2008 and its aftermath in 2009–have become significant technology companies. Those companies include , , , , , and . Investors will continue seeking those opportunities, having raised unprecedented funds themselves with no shortage of money to invest. And with valuations likely to be capped, this might just be a good time to invest.

Sequoia signs off with: “Stay healthy, keep your company healthy, and put a dent in the world.”

Illustration: .

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Chroma Labs was founded in 2018 by ex- and employees Alex Li, John Barnett and Joshua Harris to help social media gurus create aesthetic and interactive stories. For those of you who don’t know what stories are, think of them as posts that generally expire after being posted for 24 hours (of course, exceptions exist).  , Chroma Labs helps users create templates and filters, as well as “powerful text tools.” Some phrase it as a competitor to Unfold, which I wrote about before and was acquired by Squarespace in October 2019.

Chroma Labs, in its website post, claims millions have used the company to create stories. , the business is shutting down, “effectively immediately.”

Interestingly enough, Twitter doesn’t (yet) have the feature for users to post stories, which is precisely what Chroma Labs is focused on. . It tells us that there might be a pretty innovative product update in the future. Until that is clarified, let’s look at what we have so far.

Kayvon Beykpour, a product lead at Twitter and the co-founder of , tweeted that the team will “join our product, design, and eng teams working to give people more creative ways to express themselves on Twitter.”

And finally, in it also pointed to key objectives “increasing development velocity and trust” and “increasing healthy public conversation.” With today’s investment, it seems like Twitter’s trying to tackle both in one go.

In an email to Crunchbase News, a Twitter spokesperson pointed to the company’s broader hiring goals: “We are approaching hiring in many different ways given our global hiring targets this year: acquisitions, recruiting, acquihire and team hires.

“We’re continuing to acquire talent to bolster our talent, leadership and expertise in order to better serve the public conversation.”

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