Posted by: admin | October 10, 2008

Sequoia Capital “RIP: Good Times” Presentation

Sequoia Capital is one of the most successful and longest running venture capital firms located in Silicon Valley.  Since they were founded in 1972, they have invested in some of the most successful companies of the last decade, including but not limited to: Electronic Arts, Google, Ebay, Paypal, Yahoo, and YouTube.

Just to give you an example, Sequoia invested a total of $11.5 million in YouTube from November 2005 to April 2006.  In November 2006, Google acquired YouTube for $1.65 billion.  Sequoia’s stake in YouTube has been estimated at roughly 30%, which would give it a value of $495 million, giving the firm a 43x cash-on-cash return in only 12 months!

These guys are obviously very, very sharp.  Sequoia Capital recently gathered the CEOs of its portfolio companies for a presentation on how to survive an economic downturn. The message is very simple – companies need to stay ahead of the curve as much as possible. Cut costs now, and raise capital if you can. If there’s someone out there willing to buy you, do it. Its 56 slides but has some really insightful points, you should check it out:

Sequoia Capital slideshow on the current economy

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Responses

  1. is off-shoring going to be silver bullet for this problem ? It might not be, but it will definitely help reduce operational costs for these startups.

    http://www.confiz.com
    your offshore development partner

  2. Raza,

    I agree with your comment.

    Companies are facing huge competition from their competitors to provide better services, and at the same time lower their costs. Companies are constantly innovating the way they are conducting businesses and business process outsourcing (“BPO”) allows them to partner with external specialized vendors for efficient operations. Offshore BPO is cheaper than onshore BPO and many companies are now moving their operations to offshore locations, India being the most preferred destination.

    The financial services and government sectors remain the dominant sectors for BPO, with industry-specific activity in the financial services and state and local government sectors remaining key growth opportunities.


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