We were able to track down the presentation that Sequoia Capital gave to its portfolio company CEO’s earlier this week (and so did VentureBeat). It’s a long, 56 slide Powerpoint message of doom and gloom in Silicon Valley that we covered yesterday along with an email that angel investor Ron Conway sent to his 130 active portfolio companies.

The final text slide reads “Get Real or Go Home.”

Benchmark Capital jumped on the band wagon today with their own email to portfolio companies. The messages are all similar - companies need to stay ahead of the curve as much as possible. Cut costs now, and raise capital if you can. If there’s someone out there willing to buy you, do it. Etc.

Of course all this negativity helps create the very downturn that venture capitalists are warning their companies to defend themselves against, perpetuating a sort of vicious cycle downward. But that’s ok, sometimes the hedge needs to be pruned. And this is what makes Silicon Valley its ugly, beautiful self.

This is the best explanation of what is going on that i have found so far.