Why VCs put a brake on startups burning money

Updated: June 7, 2022, 12:03 PM IST

Mid-May a presentation of venture capital biggie Sequoia up to 250 of its start-up clients caused a furore in the corporate world. Essentially, the investor told: startups that their time of burning money and chasing huge valuations is over. “When capital was free, the best performing companies were capital guzzling,” read one of the slides in the presentation. “As capital has become expensive, these have become the worst performing companies.” In fact, startups were told the party was over.

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