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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: .

The purchase price is comprised of a mix of cash and DoorDash stock, according to

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“This transaction allows us to increase our focus on and investment in our two large, growing ecosystems—one for businesses and one for individuals,” Square wrote in its letter. “It creates clarity in how we operate and a clearer purpose and alignment for our planning, investment, and work moving forward.”

DoorDash has a pre-existing relationship with Square. It partners with Square for restaurants to enhance online and in-person orders for merchants. Founded in 2013, DoorDash has raised during its life as a private company.

“We believe continuing this partnership provides valuable and strategic opportunities for Square,” the San Francisco payment processing company stated.

This isn’t the first time Square has tried to sell Caviar.

in 2016 that the payment processing company wanted to step away from food delivery and tried selling the company to Uber, GrubHub, and Yelp. In 2016, the proposed price for DoorDash was $100 million.

Since Square bought Caviar in 2014, the business unit has struggled to turn a profit, maintaining regular losses. Square may come out financially whole in the end, however. Given the gap between the purported purchase price and the final sale price, our guess is Square is making up reasonable value through the sale.

Of course the value of DoorDash stock could decline, limiting Square’s upside.

DoorDash has been on a tear in recent quarters, raising , , and all inside the last twelve months. (The Series E was announced on August 16, 2018.)

Let’s all remember that DoorDash is under fire for controversial, and possibly . Buying Caviar might tell us that it certainly had the money to scoop up a company.

The food delivery space is heating up. On page 4 of , it states that the online food-ordering market generated approximately $27 billion sales in 2018 and is expected to grow at a double-digit rate through 2020.  with its product, DoorDash, , and others are battling for market share and, eventually, margins. Today the competition between the competing players seems to be more focused on revenue than profits. The unprofitable Caviar will supply fresh growth to its new parent company, but little in the way of net income.

Illustration:

Square and Twitter share a CEO, making them an odd couple in the technology world. Helmed by Jack Dorsey, Square focuses on taking payments for a host of businesses around the country while Twitter is a global public messaging tool.

The companies don’t share much in terms of product surface area, but their shared leadership brings the two companies together. And notably, the firms have been on a tear in recent weeks, rising to a record, combined value – at least in the local time frame.

Twitter reported a , sending its shares skyrocketing. Investors seemed cheered by user growth and hints of impending GAAP profits. Shares of Twitter reached their highest levels since mid-2016.

Square’s story is simpler. Its share price has been on a tear since mid-2016, setting new, all-time highs in recent weeks. The result of both trends is a combined market cap that is at least a local maximum. (Twitter’s high value in its early life makes it difficult to say that the two firms are at an all-time share high, as when Twitter was worth the most Square wasn’t a public company yet.)

Here’s their shared market cap over time, :

Square’s earnings are ahead of it, meaning that the firm could disappoint, causing its share price to deflate. But for now, Square is near all-time highs and Twitter is near its 52-week highs. Not bad for two companies with just once CEO.

From the :

Bitcoin, cryptos hit new highs

• Bitcoin surged past $7,000 for the first time, with its value now more than triple what it was six months ago. Bitcoin’s rise comes as the aggregate value of cryptocurrencies sets new records, reaching close to $185 billion this week.

HelloFresh delivers IPO

• Berlin-based meal kit company  raised up to $369 million in an IPO on the Frankfurt Stock Exchange, pricing shares at the middle of its expected range. The stock rose slightly in first-day trading.

TransferWise raises $280M Series E

• Money transfer service  has raised $280 million in a Series E funding round led by Old Mutual Global Investors and IVP. The new financing reportedly values the London-based company around $1.6 billion.

Autonomous driving deals rev up

• For driverless car startups, raising capital seems to happen on autopilot. Investors and acquirers have put billions into the space over the past couple years in the race for early mover advantage. They’ve shown no desire to hit the brakes lately either, with a Crunchbase News analysis showing an uptick in year-over-year investment, along with rising valuations.