“The Black Swan of 2020″. That is what VC firm Sequoia Capital called the Covid-19 coronavirus—now declared a pandemic by the World Health Organisation—in a memo to its portfolio founders earlier this month.

“Black swan” is a term coined by eminent scholar, Nassim Nicholas Taleb to describe describe Amazon The Black Swan: The Impact of the Highly Improbable Read more an unprecedented low-probability event that has a massive impact but was impossible to predict and therefore impossible to prepare for a priori.

While there is little doubt left that Covid-19 will have a major impact, both in economic and humanitarian terms, its emergence was neither unpredictable nor unexpected. The last two decades have seen several global epidemics from SARS in 2002 to H1N1 in 2009 to the Ebola outbreak in 2014 foreshadowing Covid-19.

Except Covid-19 is suspected to be 30x more deadly and almost 2x more contagious than the flu, making it a far larger threat than previous outbreaks.

Sequoia’s memo warned of a precipitous drop in business activity across the globe, supply chain disruptions (due to the lockdown in China) and cascading economic effects and curtailment of travel and cancelled meetings impacting sales and business development activities. The firm advised companies to ask tough questions around cash runway and fundraising as well as sales forecasts, capital spending and headcount, urging them to be largely conservative and cognizant of emergent risks.

That Sequoia felt the need to publish such a memo memo Medium Coronavirus: The Black Swan of 2020 Read more openly for public consumption is telling. The firm’s portfolio portfolio Sequoia Capital The Dentmakers Read more  includes epochal companies such as Google, YouTube, WhatsApp and Oracle to the hottest startups of the current age – the likes of Airbnb, Dropbox, Square, Stripe and Zoom. 

One could reasonably expect these Sequoia-backed players to be the last ones standing. Sequoia is currently investing out a flagship $8 billion fund that is by far the largest amongst its peers and to wit, it would be almost impossible to find a Sequoia-funded startup that has died due to starvation.

And yet, it published the memo. The last time Sequoia did such a thing was in 2008, with a similar public memo called “R.I.P. Good Times”’—it captured the economic and funding zeitgeist at that time.