Why VCs are putting the brakes on cash burning startups

In mid-May, a presentation by venture capital biggie Sequoia to 250 of its startup clients made waves in the business community. Essentially, the investor told startups that their time of burning money and chasing huge valuations has ended. “When capital was free, the best performing companies were capital consumptive,” read one of the slides in the presentation. “As capital has gotten expensive, these have become the worst performing companies.” In effect, startups were being told that the party was over.