Mar 18, 2021 - Economy
Sequoia Capital to startups: Get ready for an economic comeback
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Illustration: Sarah Grillo/Axios
A year after warning startups that the pandemic will be a "Black Swan" event that upends everything, Sequoia Capital is nudging them to prepare for an economic comeback in the second half, according to a memo sent to its portfolio on Thursday.
Why it matters: While the pandemic ground certain sectors to a halt, much of the technology realm flourished as consumers had to dramatically shift much of their lives online. And despite a short adjustment early in the pandemic, venture capital has been backing startups at record levels.
What they're saying:
The U.S. is poised for stronger economic growth in the second half of 2021 than we’ve seen in decades. As vaccines bring an end to lockdowns closer, consumer debt has dropped, savings have risen and more stimulus is on the way. [...]
But if you want to maintain momentum, the time to start accelerating is when you’re at the apex of the turn. The current moment in our road to recovery represents an opportunity. If you feel confident about your business post-vaccine, now is the time to start carefully stepping on the gas (or accelerator pedal, if you’re driving electric).
In many ways, COVID pulled forward the future that technology companies have been building. Behaviors that would have taken decades to go mainstream were normalized in a matter of weeks. The question is: which behaviors will persist over the next decade, and which will be fleeting? Enduring companies are built around long-term trends and behaviors, so take advantage of this window while keeping your sights trained on what you could accomplish over the next decade.— Sequoia Capital team
