A couple of days ago the CEO and founders of Sequoia Capital, one of the biggest VC standing behind such success stories as Dropbox, LinkedIn or Stripe, has openly published a letter they have sent to their partners providing guidance on protecting their business as well as dealing with consequences of the spreading effects of the coronavirus.

Sequoia businesses are present in many regions around the world so they are gaining first-hand information on the impact coronavirus has on global business and the challenges companies need to face as a result of the virus outbreak. So far the main problems global business needs to face are identified as follows:

General slow-down of any business activities
Many companies have experienced a significant slow down in their business growth, some of them will probably have problems meeting their planned goals for Q1-2020.

Source: undraw.co

Disruptions of the supply chain
China is the world's largest supplier of ... many goods. The scale of an industry lockdown in China is huge and its seriously affecting the global supply chain. The modern software industry might not feel the slow-down as much as other sectors as it's not influenced by the supply chain distribution but is still exposed to the risk indirectly.

Business trips & meetings cancelations
The no-travel policy has been applied to many companies. Some of them are banning all international travels, some just those non-essential for their businesses.

Source: undraw.co

Sequoia Capital team suggest questioning each assumption crucial to your business functioning especially those: cash runway, fundraising, sales forecast, marketing spend, headcount, capital spending.

Remember that as with all crises, revenue and cash levels always fall much faster than expenses. Be prepared to respond to changing circumstances and remember that same as in nature the most adaptable to change will survive. IF you want to read the full letter sent out by the VC, it's available on Sequoia Capital Publications on Medium.

Be vigilant, stay healthy & keep your business in good health!

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