On Sunday night, BusinessWeek.com published my scoop on the email that Foundation Capital sent to the CEOs of its 70 portfolio companies. Grosser’s admonition is one of several warnings issued by venture financiers to entrepreneurs over the last week or two. It’s reality check time in startup land.
Foundation Capital General Partner Adam Grosser sent the email on Sep. 29, about a week before angel investing big-shot Ron Conway sent his SOS and Sequoia Capital held their now infamous come-to-jesus meeting.
In a missive gingerly titled “Thoughts on the Economic Environment,” Grosser strongly advised the startups to rethink their operating plans for 2009 with a focus on cutting unnecessary costs, raising money, and curtailing the use of debt.
“It is likely that there will be extremely limited liquidity opportunities for the next two years,” Grosser wrote. In a separate e-mail he noted that his portfolio companies are performing well.