Exclusive: Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates RiseView Now

Roelof Botha, partner at Sequoia Capital. Photo by Getty

Sequoia Warns Founders of ‘Crucible Moment,’ Advises How to ‘Avoid the Death Spiral’

Photo: Roelof Botha, partner at Sequoia Capital. Photo by Getty

Sand Hill Road’s doomsayer-in-chief—Sequoia Capital—is back with a warning to its startup founders: Don’t expect a recovery from the current market downturn to happen quickly.

Over the years, Sequoia, the venture firm behind Google, Apple and Airbnb, has developed a reputation as the tech industry’s Cassandra, through memos and presentations that it shared with the leaders of its portfolio companies during past macroeconomic crises. In 2008, that took the form of a 56-slide survival guide to the Great Recession, entitled  “R.I.P. Good Times.” In early 2020, as the pandemic began upending the economy, Sequoia sent its founders a grim memo entitled, “Coronavirus: The Black Swan of 2020.”

Its latest warning to its portfolio companies takes the form of a 52-slide presentation, a copy of which was viewed by The Information. Sequoia described the current combination of turbulent financial markets, inflation and geopolitical conflict as a “crucible moment” of uncertainty and change. Sequoia told founders not to expect a speedy economic bounceback akin to what followed the start of the pandemic because, it warned, the monetary and fiscal policy tools that propelled that recovery “have been exhausted.”  The firm suggested founders move fast to extend runway and to fully examine the business for excess costs. “Don’t view [cuts] as a negative, but as a way to conserve cash and run faster,” they wrote. [Read the full presentation below.]

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Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates Rise
Adena Hefets, co-founder and chief operating officer of Divvy Homes Inc. Photo: Bloomberg
Divvy Homes, a property tech startup backed by Andreessen Horowitz and Tiger Global Management, laid off about 12% of its staff Tuesday. The cuts reflect how younger real estate firms are responding to rising mortgage rates that have battered the home-buying market. The layoffs affected roughly 40 employees at the five-year-old firm. Divvy Homes buys homes in the U.S. and rents them to people...
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