Across 52 slides, the world’s top venture-capital firm, Sequoia, detailed how startups should prep for the gathering storm of a global investor pullback this year. It shared the survival guide on May 26, and jittery founders — irrespective of company size, cash reserves and country — promptly made notes.

This was the second time in two years that it had forewarned the free-spending tech ecosystem of a funding downturn.

Early in March 2020, it termed Covid-19 a black swan event, quoting naturalist Charles Darwin to encourage quick recalibration by companies: those who endure “are not the strongest or the most intelligent, but the most adaptable to change”. Perhaps the observation applies even now. 

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From unicorns to early-stage startups, everyone is downsizing ambitions

This year, along with Sequoia, Indian venture firms also sent out memos to their portfolio companies as markets sank, inflation hardened and investment giants SoftBank and Tiger Global reported massive losses. The overarching message in these memos: 2021’s funding boom is over. The subtler hint: the balance of power in fundraising negotiations will shift from entrepreneurs to investors.