User:VS for Sequoia Capital/Full draft

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Sequoia Capital is a venture capital firm headquartered in Menlo Park, California. Sequoia specializes in seed stage, early stage, and growth stage investments in private companies across technology sectors. Notable companies that Sequoia has invested in include 23andme, Airbnb, Apple, DoorDash, Google, Instagram, LinkedIn, Stripe, WhatsApp, YouTube, and Zoom. The firm has distinguished itself from other top venture capital firms through successful early bets in large tech companies. Sequoia has been structured to encompass three different venture entities: one focused on the U.S. and Europe, another on India and Southeast Asia, and a third on China.

History[edit]

Early history and investments[edit]

Sequoia was founded by Don Valentine in 1972 in Menlo Park, California,[1][2] at a time when the state’s venture capital industry was just beginning to develop.[3][4] Valentine named the firm after the redwood trees that grow in Northern California and are known for their strength and longevity.[5][6]

Sequoia formed its first venture capital fund in 1974,[3][7] and was an early investor in Atari the next year.[5][8][9] In 1978, Sequoia became one of the first investors in Apple.[8][6][10]

In the 1980s, Electronic Arts and Sierra Semiconductor both incubated in the Sequoia offices.[10][11] Sequoia was an early investor in Oracle in 1983, six years after the company was founded, and also invested in Cisco in 1987.[12][13][5]

Partners Doug Leone and Michael Moritz assumed leadership of the firm in 1996.[5][14]

Global expansion[edit]

In 1999, Sequoia established a dedicated investment fund for Israeli startups,[15] and the firm expanded its operations further into global markets in the early 2000s.[3] In 2005, Sequoia Capital China was established.[16] In 2006, Sequoia Capital expanded to India with the acquisition of Westbridge Capital Partners, an Indian venture capital firm.[17] This acquisition eventually became Sequoia Capital India.[17]

2010s[edit]

In 2012, Moritz took a step back from the day-to-day operations of the firm after being diagnosed with an unspecified illness.[18] Leone became Global Managing Partner.[19][20] Jim Goetz led Sequoia’s US business from 2012 until 2017, when he was succeeded by Roelof Botha.[21]

In 2015, Michael Moritz was questioned about Sequoia's lack of any women investing partners. Moritz argued that there were few qualified female candidates, because American women "tend to elect not to study the sciences when they’re 11 or 12", and said that Sequoia would not "lower our standards" to hire women.[22]

In 2016, Sequoia hired Jess Lee, making her the first female investing partner in the United States in the firm's 44-year history.[23][24]

2020 to present[edit]

In March 2020, Sequoia announced it would hire Luciana Lixandru as its first partner based in Europe.[25][26]

On March 5, 2020, Sequoia Capital sent a notice to its portfolio companies warning that the global economy could be restrained by the coronavirus, and urging these companies to “question every assumption about your business."[27]Cite error: A <ref> tag is missing the closing </ref> (see the help page). The memo echoed a presentation called "R.I.P. Good Times" that was prepared by the firm in 2008 and detailed how to survive the economic downturn.[28][29] In March 2021, Sequoia sent a follow-up memo to founders called “COVID Accelerated the Future: Now Seize It”, instructing them to prepare for a window of opportunity as the world begins to reopen after the COVID-19 pandemic.[30]

In October 2021, Sequoia announced it would implement a new fund structure for its U.S. and European business that would allow it to remain involved with companies after their public market debuts.[31][32][33]

Investments[edit]

Sequoia Capital is structured as a limited liability company.[34] Investors, referred to as limited partners, contribute money to a fund that the firm's general partners then invest in business ventures.[35][36] Sequoia's limited partners have primarily been university endowments, charitable foundations, and other large institutions.[37][38][39]

Sequoia specializes in seed stage,[40] early stage,[40] and growth stage[41] investments in private technology companies,[42] including those in the clean tech, consumer internet, crypto, financial services, healthcare, mobile, and robotics sectors.[34][43][44] Sequoia has been recognized for its strong track record of early investments.[45][46] The firm has also distinguished itself from other top venture capital firms by diversifying its investments and not just focusing on U.S. early-stage venture capital.[41][3][47]

Sequoia is an umbrella brand for three different venture entities: one focused on the U.S. and Europe, another on India and Southeast Asia, and a third on China.[48] Notable investments for Sequoia Capital India include Byju and Ola.[3][49][50] Notable investments for Sequoia Capital China include Alibaba, Bytedance, and Meituan.[3][51][52] In October 2021, Sequoia Capital China participated in a US$65 million funding round in Animoca.[53] In November 2021, The Wall Street Journal reported that Sequoia Capital’s China unit is a major investor in Chinese semiconductor firms, raising U.S. national security concerns.[54]

Sequoia's notable early investments include Atari and Apple in the 1970s, Cisco and Oracle in the 1980s, Yahoo and Google in the 1990s, Airbnb and LinkedIn in the 2000s, and Stripe, Square, and WhatsApp in the 2010s.[45] In 2019, Sequoia made more new seed-stage investments than Series A deals.[55] 2020 was reported to be one of the firm’s best years, with eight Sequoia portfolio companies going public in the United States.[56][57] The Airbnb and Doordash IPOs collectively earned the firm stakes worth more than $23 billion.[57] That same year, Hurun Research Institute identified Sequoia as the world's top unicorn investor, noting it had invested in one in five of all private companies valued at $1 billion or more.[58][59]

In July 2021, Sequoia published a piece about "the Latin American startup opportunity" that signaled it would increase its focus there.[60][61] The firm previously invested in regional unicorns Nubank and Rappi.[62]

In October 2021, Sequoia announced The Sequoia Fund, a new fund structure for its U.S. and European business.[63][64] The Sequoia Fund is an open-ended capital vehicle for all future Sequoia sub-funds.[63][64] This new structure enables Sequoia to remain involved with and invested in companies after their public market debuts.[31][32][33] Sequoia also announced it was registering as an investment advisor, providing flexibility for the firm to invest in more crypto assets and secondary stock.[64][65] A quarter of Sequoia’s new investments in 2021 were crypto-related.[44]

Programs and partnerships[edit]

In 2009, Sequoia launched its scout program, which functions as an individual investor network, managed by Sequoia, that provides founders and other individuals with capital to invest in promising early-stage startups.[66][67] Sequoia Scouts have invested in over 1,000 companies, including Stripe, Faire, and Uber.[68] Sequoia was the first venture capital firm to offer a scout program, and the model has since been emulated by others in the industry.[66][67]

In December 2020 Sequoia expanded the scout program to Europe.[69] In 2021, Sequoia partnered on the BLCK VC Scout Network to provide training and education to current and aspiring Black scouts.[68]

Sequoia's Company Design program is a multi-week "crash course" for pre-seed, seed, and Series A founders that includes training from Sequoia partners.[67][70]

References[edit]

  1. ^ McBride, Sarah (February 20, 2014). "With WhatsApp deal, Sequoia Capital burnishes reputation". Reuters. Retrieved June 28, 2021.
  2. ^ Larreur, Charles-Henri (2021). Structured Finance: Leveraged Buyouts, Project Finance, Asset Finance and Securitization (1st ed.). US: Wiley. p. 81. ISBN 1119371104. Retrieved June 28, 2021. Don Valentine created Sequoia Capital in 1972 in Menlo Park, California.
  3. ^ a b c d e f Da Rin, Marco; Hellman, Thomas (2020). Fundamentals of Entrepreneurial Finance (1st ed.). Oxford University Press. p. 485. ISBN 0199744750. Retrieved June 28, 2021.
  4. ^ Ferrary, Michel; Granovetter, Mark (May 20, 2009). "The role of venture capital firms in Silicon Valley's complex innovation network". Economy and Society: 326–359. doi:10.1080/03085140902786827. The most prominent VC firms were created in the 1970s. In 1969, the Mayfield Fund was founded; Sequoia Capital and Kleiner, Perkins, Caufield & Byers followed in 1972. By 1975, more than thirty VC firms were located in the Bay Area.
  5. ^ a b c d Griffith, Erin (October 25, 2019). "Don Valentine, Founder of Sequoia Capital, Is Dead at 87". The New York Times. Retrieved June 27, 2021.
  6. ^ a b Stellabotte, Ryan (October 30, 2019). "Fordham Mourns the Death of Don Valentine, Silicon Valley and Venture Capital Pioneer". Fordham News. Fordham University. Retrieved June 27, 2021.
  7. ^ Loizos, Connie (October 25, 2019). "Don Valentine, who founded Sequoia Capital, has died at age 87". TechCrunch. Retrieved June 27, 2021.
  8. ^ a b Guthrie, Julian (December 7, 2011). "'Something Ventured' tells story of tech investors". San Francisco Chronicle. Hearst. Retrieved June 30, 2021.
  9. ^ Nicholas, Tom (2019). VC: An American History. US: Harvard University Press. p. 228. ISBN 0674988000. Retrieved June 30, 2021.
  10. ^ a b Henbroth, Megan (October 26, 2019). "Sequoia Capital founder Don Valentine has died at age 87". Business Insider. Insider Inc. Retrieved June 30, 2021.
  11. ^ Berlin, Leslie (2017). Troublemakers: Silicon Valley's Coming of Age. US: Simon & Schuster. p. 346. ISBN 1451651503. Retrieved July 1, 2021.
  12. ^ Nicholas, Tom (2019). "Silicon Valley and the Emergence of Investment Styles". VC: An American History. US: Harvard University Press. ISBN 0674988000.
  13. ^ Winkler, Rolfe (October 27, 2019). "Venture Capital Pioneer Kept Entrepreneurs' Egos in Check". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved June 27, 2021.
  14. ^ Marinova, Polina (October 25, 2021). "Silicon Valley Remembers Sequoia Capital Founder Don Valentine". Fortune. Retrieved June 28, 2021.
  15. ^ "Cisco, Sequoia Capital set up Israeli venture fund". National Post. Financial Post DataGroup. June 28, 1999 – via LexisNexis.
  16. ^ Yang, Jing; Yu, Xie (September 10, 2020). "Successful With Chinese Startups, Sequoia China Launches a Hedge Fund". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved June 28, 2021.
  17. ^ a b Chanchani, Madhav (June 25, 2009). "Sequoia Capital exits Firstsource Solutions, Royal Orchid". Reuters. Retrieved June 27, 2021.
  18. ^ Cutler, Kim-Mai (May 21, 2021). "Venture Capitalist Michael Moritz Says He's Stepping Back From Sequoia Because Of Illness". TechCrunch. Retrieved June 28, 2021.
  19. ^ Garland, Russ (December 10, 2012). "Sequoia's Leone: In Venture, Big is the Enemy of Great". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved August 3, 2021. Leone, who has been managing Sequoia since Michael Moritz stepped back because of illness in May, skewered VCs who act like private-equity managers with corner offices and pride in their assets under management and investment "platforms."
  20. ^ Anders, George; Konrad, Alex (April 23, 2014). "Sequoia Capital: Creating Disruptions, and Billionaires". Forbes India. Retrieved August 3, 2021. Even in his perch as a managing partner at venture firm Sequoia Capital, Leone still carries himself like a hard-luck striver, scrambling for his first decent break.
  21. ^ Primack, Dan (January 31, 2017). "Sequoia Capital shakes up leadership". Axios. Retrieved June 28, 2021.
  22. ^ Kulwin, Noah (December 3, 2015). "Venerated VC Michael Moritz Opens Mouth, Inserts Foot on Question About Hiring Women". Recode.
  23. ^ Del Rey, Jason (October 20, 2016). "Sequoia Capital has hired Polyvore's Jess Lee as its first woman investment partner". Recode.
  24. ^ Benner, Katie (October 20, 2016). "Sequoia Capital Hires First Female Investment Partner in U.S." The New York Times. Retrieved August 2, 2021.
  25. ^ Boland, Hannah (March 10, 2020). "Silicon Valley's Sequoia poaches Accel partner for London office". The Telegraph. Retrieved July 2, 2021.
  26. ^ Boland, Hannah (2020-08-06). "Silicon Valley's Sequoia searching for West End office". The Telegraph. ISSN 0307-1235. Retrieved 2020-11-18.
  27. ^ Novet, Jordan (2020-03-05). "Venture firm Sequoia is sounding the alarm about the economy again as coronavirus spreads". CNBC. Retrieved 2020-03-07.
  28. ^ "R.I.P. Good Times". Sequoia Capital. Retrieved 2020-03-07.
  29. ^ "Sequoia Capital's 56 Slide Presentation Of Doom". TechCrunch. Retrieved 2020-03-07.
  30. ^ Shen, Lucinda (March 19, 2021). "The careful distinction Sequoia Capital makes in its Black Swan follow-up". Fortune. Retrieved June 28, 2021.
  31. ^ a b Matney, Lucas (October 26, 2021). "Sequoia dramatically revamps its fund structure as it looks to rethink venture capital model". TechCrunch. Retrieved November 8, 2021. Gone are the 10-year return cycles, which often pushed investors to liquidate holdings in public companies based on set timelines rather than determinations of when investments had fully matured. Sequoia says that investments will no longer have 'expiration dates;' instead, Sequoia will recycle returns from startup bets back into its central fund which it will redeploy into future investments — what the firm calls a 'continuous feedback loop.'
  32. ^ a b Schubarth, Cromwell (October 29, 2021). "Sequoia Capital just flipped the script on VC funds. Here's why and why it matters". Silicon Valley Business Journal. American City Business Journals. Retrieved November 8, 2021. By getting away with from the standard 10-year structure, Sequoia will have more leeway to not only invest before those kinds of funds but also to stay in the game long after they arrive.
  33. ^ a b Thompson, Ben (October 27, 2021). "Sequoia Productive Capital". Stratechery. Retrieved November 9, 2021. Instead of LP's investing in funds that make speculative investments in risky endeavors, Sequoia wants to keep long-term positions in companies that have proven business models and are embarking on the decade (or longer) process of improving their products and expanding their markets to the entire world.
  34. ^ a b "Sequoia Capital Operations LLC". Bloomberg. Retrieved June 28, 2021.
  35. ^ Rivlin, Gary (July 18, 2004). "Why Venture Funds Don't Want Your Cash". The New York Times. Retrieved July 1, 2021.
  36. ^ Cutler, Kim-Mai (April 1, 2018). "The Unicorn Hunters". Logic. Retrieved August 6, 2021. Venture capitalists don't just provide capital, in other words. They also have to raise it. A firm's managers—called "general partners"—are responsible for finding limited partners to finance investments. They also often have to invest a meaningful amount of their personal wealth in the fund they work for, so that limited partners are assured they have skin in the game. Historically, limited partners have included major pension funds, endowments, and other large institutions.
  37. ^ Konrad, Alex (October 13, 2019). "Sequoia VC Roelof Botha Talks Direct Listings And SoftBank: 'Good Investors Are Shock Absorbers, Not Amplifiers'". Forbes. Retrieved September 2, 2021. Sequoia also decided to work with nonprofits, foundations and universities as its own financial backers or limited partners. Those include Harvard, MIT, the Ford Foundation, the Cleveland Clinic and the Mayo Clinic[.]
  38. ^ Anders, George; Konrad, Alex (April 23, 2014). "Sequoia Capital: Creating Disruptions, and Billionaires". Forbes India. Retrieved August 3, 2021. Consider Sequoia Venture XI Fund, which in 2003 raised $387 million from about 40 limited partners, chiefly universities and foundations
  39. ^ Efrati, Amir; Konrad, Zoë (November 6, 2019). "The Information's Seed Investors to Watch". The Information. Retrieved August 3, 2021. Sequoia has seed, venture and growth funds in the U.S., as well as a global growth fund, but doesn't provide details on its funds. Sequoia most recently raised an $8 billion Global Growth Fund. Limited partners in the funds: Ford Foundation, Mayo Clinic, MIT, Stanford University, The Wellcome Trust, Harvard, Cleveland Clinic
  40. ^ a b Shen, Lucinda (February 25, 2021). "Sequoia Capital raises $195 million for its newest seed fund". Fortune. Retrieved June 28, 2021.
  41. ^ a b Metrick, Andrew; Yasuda, Ayako (2021). Venture Capital and the Finance of Innovation (3rd ed.). US: Wiley. pp. 80–81. ISBN 978-1-119-49011-1. Retrieved June 28, 2021.
  42. ^ Levy, Ari (September 18, 2020). "Silicon Valley's most prominent VC firm had a banner week: $9 billion in IPO shares while helping TikTok negotiations". CNBC. Retrieved June 28, 2021. Sequoia invests at all stages with different funds, sometimes getting in on the ground floor and other times pouring in growth capital ahead of an IPO.
  43. ^ Cordon, Miguel (October 8, 2019). "Sequoia Capital reveals 20 startups in second Surge cohort". Tech in Asia. Retrieved August 3, 2021.
  44. ^ a b Clark, Kate (October 22, 2021). "No Longer Just Crypto Curious, Sand Hill Road Investors Get Blockchain Fever". Retrieved November 6, 2021.
  45. ^ a b Winkler, Rolfe (October 27, 2019). "Venture Capital Pioneer Kept Entrepreneurs' Egos in Check". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved August 9, 2021. His hobby became Sequoia Capital, which over the following five decades has built an unrivaled record of venture capital investing, betting early on Atari and Apple Inc. in the 1970s, Cisco Systems Inc. and Oracle Corp. in the 1980s, Yahoo! and Google in the 1990s, Airbnb Inc. and LinkedIn Corp. in the 2000s, and Stripe Inc., Square Inc. and WhatsApp this decade.
  46. ^ Alden, William; Gelles, David (February 20, 2014). "In WhatsApp Deal, Sequoia Capital May Make 50 Times Its Money". The New York Times. Retrieved August 9, 2021. While Sequoia is not as flashy as some of Silicon Valley's newer tech investors, it has built a remarkable track record over the years, as an early investor in technology giants like Apple, Google, Yahoo and Oracle.
  47. ^ Demaria, Cyril (2010). Introduction to Private Equity (1st ed.). US: Wiley. p. 46. ISBN 0470745967. Retrieved June 28, 2021.
  48. ^ McBride, Sarah; Yilun Chen, Lulu (August 12, 2021). "Sequoia's China Portfolio Hits Speed Bump After Tech Crackdown". Bloomberg. Retrieved September 1, 2021.
  49. ^ Singh, Shipra (August 27, 2020). "With Byju's, OYO, Ola in its Kitty, Sequoia is the Top Investor in India". Entrepreneur India. Retrieved July 1, 2021.
  50. ^ Abrar, Peerzada (March 19, 2021). "Current moment in road to recovery: VC firm Sequoia tells founders and CEOs". Business Standard. Retrieved June 28, 2021.
  51. ^ Wu1, Kane; Zhu, Julie (September 21, 2020). "Sequoia Capital China raising $2.2 billion in new yuan fund, say sources". Reuters. Retrieved July 1, 2021.{{cite news}}: CS1 maint: numeric names: authors list (link)
  52. ^ Steinberg, Julie (September 27, 2018). "Investors Gain Billions From Chinese Tech IPO". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved June 28, 2021.
  53. ^ https://www.bloomberg.com/news/articles/2021-10-20/ubisoft-sequoia-china-help-nft-creator-hit-2-billion-valuation. Retrieved October 21, 2021.
  54. ^ O’Keeffe, Kate; Somerville, Heather; Jie, Yang (2021-11-12). "U.S. Companies Aid China's Bid for Chip Dominance Despite Security Concerns". The Wall Street Journal. ISSN 0099-9660. Retrieved 2021-11-12.
  55. ^ Shen, Lucinda (February 25, 2021). "Sequoia Capital raises $195 million for its newest seed fund". Fortune. Retrieved October 11, 2021. In 2019 and 2020, Sequoia made more investments in the companies at that stage than in Series A investments.
  56. ^ Roof, Katie; McBride, Sarah (December 6, 2020). "Sequoia Capital Warned of a 'Black Swan.' Instead, 2020 Is One of Its Best Years Ever". Bloomberg. Retrieved August 3, 2021.
  57. ^ a b Lev-Ram, Michal (May 18, 2021). "This Silicon Valley VC likes to keep a low profile—no easy feat when you have one of the biggest IPO years in history". Fortune. Retrieved August 3, 2021. Seven of Sequoia's portfolio companies IPOed in 2020 (an eighth, Clover Health, joined the public markets via a SPAC). Two of those, Airbnb and DoorDash, were the biggest IPOs of the year, earning the investment firm stakes currently worth more than $23 billion, collectively. These so-called exits helped make 2020 one of Sequoia's strongest years ever in terms of returns[.]
  58. ^ "Hurun Global Unicorn Index 2020". Hurun Research Institute. August 4, 2020. Retrieved August 3, 2021.
  59. ^ Wang, Eudora (August 28, 2020). "Sequoia Capital China files for three new funds with SEC". DealStreetAsia. DealStreetAsia Pte Ltd. Retrieved August 3, 2021. According to Huron Global Unicorn Index 2020 released in August, Sequoia Capital has by far captured a total of 109 unicorns, which are private companies valued at $1 billion and more.
  60. ^ Heim, Anna; Wilhelm, Alex (July 29, 2021). "Why Latin American venture capital is breaking records this year". TechCrunch. Retrieved September 1, 2021.
  61. ^ Sangion, Ricardo (August 30, 2021). "Foreign investors have a bigger role to play in growing Latin America's startup ecosystem". TechCrunch. Retrieved September 1, 2021.
  62. ^ Fleischmann, Isabela (July 20, 2021). "Sequoia leads $1 million Seed extension in Argentina's Pomelo". LABS. Retrieved September 1, 2021.
  63. ^ a b Primack, Dan (October 26, 2021). "Scoop: Sequoia Capital just blew up the VC fund model". Axios. Retrieved November 8, 2021.
  64. ^ a b c Levy, Ari (October 26, 2021). "Iconic VC firm Sequoia is breaking from the venture capital model to hold public stocks longer". CNBC. Retrieved November 8, 2021.
  65. ^ Jin, Berber (October 26, 2021). "Sequoia Overhauls Fund Structure to Hold Public Stocks". The Information. Retrieved August 6, 2021.
  66. ^ a b Loizos, Connie (June 7, 2019). "A peek inside Sequoia Capital's low-flying, wide-reaching scout program". TechCrunch. Retrieved June 27, 2021.
  67. ^ a b c Loizos, Connie (August 14, 2020). "Sequoia Capital has internal crash courses for its founders — here's how they work". TechCrunch. Retrieved August 3, 2021.
  68. ^ a b Konrad, Alex (May 11, 2021). "BLCK VC Launches Scout Program With Lightspeed, Sequoia To Support More Black Investors". Forbes. Retrieved June 27, 2021.
  69. ^ Shead, Sam (November 26, 2020). "Prestigious Silicon Valley VC firm looks to Europe for start-up success stories". CNBC. Retrieved November 26, 2020.
  70. ^ Jin, Berber (October 26, 2020). "Top Sequoia Investor Roelof Botha says the secret to his firm's success is unique programs like Company Design, a crash course for founders". Insider. Retrieved August 3, 2021.
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