The Grove
In September 2022, the most consequential venture capital firm in American history told its limited partners that the entity they had entrusted with billions of dollars was, in a meaningful sense, ceasing to exist. Sequoia Capital — the firm that backed Apple, Google, Cisco, Oracle, YouTube, Instagram, WhatsApp, Stripe, and approximately a quarter of the NASDAQ's market capitalization at various points since 1972 — announced it was dissolving its traditional fund structure and reconstituting itself as a single, permanent, open-ended fund it called the Sequoia Capital Fund. No more ten-year fund cycles. No more forced distributions when a portfolio company went public. No more artificial separation between the illiquid and the liquid, the early and the late. The idea was radical, even arrogant: Sequoia would become a registered investment adviser, hold public equities alongside seed checks, and compound its returns indefinitely like a sovereign wealth fund or the world's most aggressive endowment.
Eighteen months later, the firm reversed itself. In the spring of 2024, Sequoia unwound the structure, spun out its public portfolio holdings into a standalone entity, and returned to something closer — though not identical — to the traditional fund model it had abandoned. The episode was not merely a footnote about institutional plumbing. It was a stress test of the central question that has haunted Sequoia for its entire existence: Can you systematize genius? Can you build an institution around the identification of world-changing technology companies and make that institution survive — and regenerate — across decades, geographies, leadership transitions, and the fundamental randomness of innovation itself?
The answer Sequoia has produced, over fifty-two years, is the most compelling argument in the affirmative that the venture capital industry has generated. But the argument has cracks. The cracks are interesting.
By the Numbers
The Sequoia Machine
$85B+Assets under management (2024 est.)
~1,400Total companies backed since 1972
$3.3T+Combined market cap of Sequoia-backed companies (peak)
30%+Estimated share of NASDAQ market cap at various peaks
52Years of continuous operation
3Distinct geographies (U.S./Europe, China, India/SEA)
~200Investment professionals globally (pre-split)
The Immigrant's Conviction
Donald Thomas Valentine did not look like a man who would build something delicate. He was blunt, physically imposing, and operated with a salesman's instinct for power dynamics — who needed whom, and how badly. Born in 1932 in Yonkers, New York, Valentine studied chemistry at Fordham, served in the military, and then did the thing that would shape his entire worldview: he sold semiconductors for Fairchild and then for National Semiconductor, working directly under Charlie Sporck, the legendary operations manager who understood that the semiconductor business was not really about physics but about manufacturing yield curves, customer lock-in, and the willingness to cut price faster than your competitor could cut cost.
Valentine arrived in Silicon Valley in the 1960s and absorbed the central insight that would become Sequoia's founding DNA: the value in technology accrues not to the inventor but to the entrepreneur who identifies a large market, builds an organization to serve it, and executes with operational ruthlessness. When he founded Sequoia Capital in 1972, naming it after the giant redwoods of coastal California, Valentine was not interested in funding brilliant engineers with interesting ideas. He was interested in funding markets. "I have always been more interested in the market than the people," he said, in a formulation that sounds heretical in a business that worships founders. What he meant was subtler: markets of sufficient size and growth create opportunities for even imperfect execution to succeed, while no amount of genius can overcome a market that doesn't exist.
This orientation produced a portfolio that, in hindsight, reads like a roadmap of the digital economy's entire arc. Atari in 1975 — Valentine's personal connection to
Nolan Bushnell led to the introduction that would change everything. Apple Computer in 1978 — not because Valentine loved
Steve Jobs (he found him difficult, unwashed, and erratic) but because the personal computer market was, to Valentine's trained eye, the most explosive demand curve since the transistor. Cisco Systems in 1987 — husband-and-wife team Sandy Lerner and Len Bosack had built a router in Stanford's computer science department and were selling it out of their house, and Valentine saw not a router but the backbone of enterprise networking. Oracle. Electronic Arts. LSI Logic.
The pattern was consistent. Valentine backed things that routed packets, computed instructions, or captured markets that were growing faster than the founders themselves fully understood. He was not a mentor-investor in the mold that would become fashionable decades later. He was a board member who fired founders — including, in a move that shaped Cisco's trajectory, Sandy Lerner and Len Bosack themselves — when he concluded that operational requirements had outpaced founding team capabilities.
Target big markets. If you don't attack a big market, it's unlikely you'll build a big company.
The Succession Machine
The venture capital industry's longest-running joke is that succession doesn't work. The list of legendary firms that could not survive their founders — firms where the magic was personal, idiosyncratic, and ultimately non-transferable — is long enough to constitute an industry pattern: Kleiner Perkins after
John Doerr's peak years, Draper Fisher Jurvetson through various reconfigurations, dozens of smaller shops that simply faded when the senior partner stopped coming to Monday meetings.
Sequoia's answer to this problem is the most important thing it ever built, and it was not a fund structure or a software tool or an analytical framework. It was a culture of deliberate, multi-generational succession that began far earlier than any comparable firm attempted it — and that imposed real costs on the individuals who executed it.
The first transition was Valentine to Doug Leone and
Michael Moritz, and it unfolded across the 1990s in a way that was neither clean nor inevitable. Leone, an Italian-born immigrant who had arrived in America at age eleven speaking no English, had the operational intensity and competitive fire that Valentine recognized as native — the hunger of displacement, the chip-on-the-shoulder drive that immigrant founders carried and that Valentine, himself a descendant of Italian immigrants, understood instinctively. Leone joined Sequoia in 1988 and spent years as a junior partner before earning his way into the leadership cadre.
Moritz was different in almost every dimension. Welsh-born, Oxford-educated, a former journalist for
Time magazine who had written an early book on Apple —
The Little Kingdom — Moritz brought an analytical precision and an almost literary sensitivity to pattern recognition. Where Valentine saw markets, Moritz saw founders. Where Leone hunted through force of personality, Moritz listened. His investment track record during the late 1990s and early 2000s would become, by any reasonable measure, the greatest run in venture capital history: Google, Yahoo, PayPal, YouTube, LinkedIn. Not one of them, not two — all of them, across a single career arc.
Sequoia's generational transitions
1972Don Valentine founds Sequoia Capital with a $3 million fund.
1988–1996Doug Leone and Michael Moritz join and rise through the partnership.
1996Valentine steps back from day-to-day investing; Leone and Moritz become co-stewards.
2012Moritz steps back from active investing due to health issues; Jim Goetz rises.
2017Roelof Botha named as U.S. steward alongside Leone.
2022Roelof Botha becomes sole managing partner of Sequoia's global operations.
2024Sequoia separates China and India/SEA operations into independent entities.
Valentine engineered this transition with the same unsentimental clarity he brought to replacing CEOs. He reduced his own economics, ceded decision-making authority, and — crucially — refused to second-guess. The model he established was specific: senior partners would mentor successors for years, hand off lead-partner relationships on key deals, and then reduce their carry and management fee allocations to create economic room for the next generation. It was painful. It was also the single most valuable institutional asset Sequoia possessed, because it meant the firm's pattern-recognition capabilities were not stored in one brain but distributed across a partnership that was designed to refresh itself.
The Returns That Built Religion
Venture capital is a business where the distribution of outcomes follows a power law so extreme that most of the industry's total returns, across all firms, across all decades, are generated by fewer than a hundred investments. Sequoia has an outsized share of those investments, and the specific economics explain why the firm commands the loyalty — and the capital — that it does.
Consider a single data point: Sequoia invested approximately $60 million across multiple rounds in WhatsApp before its acquisition by Facebook for $22 billion in February 2014. Sequoia's stake was worth approximately $3 billion at close. On one investment. In one fund. That fund — Sequoia Capital U.S. Venture XIV — returned something in the range of 50x to its limited partners, depending on the timing of distributions. A single-fund performance of that magnitude is not merely good. It is civilization-level capital creation compressed into a partnership agreement.
But WhatsApp was not an outlier in the Sequoia portfolio. It was the outlier among outliers. Google, where Sequoia invested $12.5 million in the Series A in 1999, went public in 2004 at a valuation of $23 billion and eventually reached a market capitalization exceeding $2 trillion. Apple, backed in 1978. Cisco, backed in 1987 — Valentine took 30% of the company for $2.5 million, and Cisco became the most valuable company in the world in March 2000, briefly touching a market capitalization of $555 billion. YouTube, acquired by Google for $1.65 billion in 2006, just eighteen months after Sequoia led its $3.5 million Series A. Instagram, where Sequoia participated in the $50 million Series B, acquired by Facebook for $1 billion in 2012.
The compound effect of these outcomes is why Sequoia's limited partners — a carefully curated group of university endowments, foundations, family offices, and sovereign wealth funds — do not leave. Sequoia does not need to market itself. It has a waitlist. The endowments that got into the early funds have been compounding their venture allocations for decades, and the opportunity cost of exiting is measured not in basis points but in generational wealth creation forgone.
We've always felt that the best way to predict the future is to arrive at the right doorstep at the right time with the right amount of money.
The economic structure of the firm is opaque — Sequoia is, like all partnerships, allergic to disclosure — but what is known through LP disclosures, public filings, and industry reporting paints a picture of extraordinary consistency. Across its U.S. venture funds from the mid-1990s through the early 2020s, Sequoia generated net IRRs that frequently exceeded 40-50% and multiples that clustered above 5x net. The firm's growth equity funds, launched later, performed well but not at the same level of exceptionalism. The venture funds were the engine, and the engine ran on a specific type of fuel: conviction bets on companies at seed and Series A that became category-defining platforms.
The Cathedral and the Bazaar
Every great venture firm develops an investment philosophy, but most philosophies, examined closely, amount to "we invest in great founders building great companies in great markets" — a tautology that explains nothing about actual decision-making. Sequoia's philosophy, by contrast, has a specific and identifiable shape that evolved across generations but maintained a recognizable core.
Valentine's market-first orientation was the foundation. But Moritz and Leone layered onto it a founder assessment framework that was, in its internal vernacular, surprisingly literary. Sequoia partners talked about "arc of narrative" — could the founder tell a story about the future that was simultaneously ambitious enough to be world-changing and grounded enough to be credible? They talked about "earned secrets" — what did this founder know, through direct experience, that was both true and not widely understood? They talked about "outlier energy" — a quality that was not charisma exactly, but a certain barely-contained intensity that suggested the founder would run through walls rather than accept defeat.
The firm systematized these intuitions into what it called the "company design" framework — a set of structured questions that every investment memo was expected to address:
- Why now? What has changed in technology, regulation, or market structure that makes this opportunity available at this specific moment?
- What is the earned secret? What insight does this team possess that competitors do not?
- What is the market size and shape? Is this a market that already exists and is being disrupted, or a market being created?
- What is the unfair advantage? Is there a compounding advantage — network effects, data feedback loops, regulatory moats, switching costs — that grows with scale?
- What is the business model endgame? How does this become a highly profitable, durable enterprise?
None of these questions is individually novel. The discipline was in the rigor with which they were applied, the willingness to say no when any answer was unsatisfying, and the culture of internal debate — adversarial, sometimes bruising — that stress-tested every investment decision before commitment.
Jim Goetz, who joined Sequoia in 2004 and would become one of its most successful investors, exemplified the next layer of evolution. Goetz — a Cincinnati-born electrical engineer with degrees from the University of Cincinnati and Stanford, who had spent years in the trenches at network infrastructure companies — brought a technical depth that complemented Moritz's journalistic intuition. His masterwork was WhatsApp: Goetz identified Jan Koum and
Brian Acton's messaging application as an existential threat to the telecommunications industry's SMS revenue model at a time when most investors were chasing social networks and advertising platforms. The investment thesis was not that WhatsApp was a social network. It was that WhatsApp was a utility — and that a utility serving 450 million active users with 70% daily engagement was worth essentially whatever Facebook would pay to prevent it from becoming a competing platform.
Going East — The Sequoia Franchise
The story of Sequoia's international expansion is the story of whether the pattern recognition that worked in California could survive translation across languages, regulatory regimes, and fundamentally different market structures. The answer turned out to be: yes, for a while, and then the centrifugal forces won.
Sequoia entered China in 2005, partnering with Neil Shen (Shen Nanpeng), a Shanghai-born entrepreneur who had co-founded Ctrip, China's dominant travel booking platform, and Home Inns, a budget hotel chain. Shen was not a Silicon Valley import learning Chinese business culture; he was a creature of the Chinese entrepreneurial ecosystem who happened to share Sequoia's investment philosophy. The partnership was, by every financial metric, spectacularly successful. Sequoia China backed ByteDance (the parent of TikTok), Meituan (China's super-app for services), Pinduoduo (the e-commerce disruptor), JD.com, Didi Chuxing, and dozens more. Shen built Sequoia China into the most formidable venture and growth equity franchise in the world's second-largest economy, managing tens of billions of dollars and generating returns that rivaled or exceeded the U.S. fund's performance in certain vintage years.
Sequoia India, launched in 2006 under Sumir Chadha and later led by Shailendra Singh, followed a similar playbook adapted for the subcontinent's unique dynamics — a massive mobile-first consumer market, a deep engineering talent pool, and regulatory complexity that rewarded local knowledge. The portfolio included Zomato, Byju's, Freshworks, Ola, Pine Labs, and dozens of growth-stage companies across India and Southeast Asia.
We don't franchise. We don't export. We hire local people with deep local knowledge and give them the Sequoia brand, the Sequoia network, and the Sequoia expectation of excellence. Then we get out of the way.
For nearly two decades, this decentralized model worked brilliantly. The brand was global, the capital base was shared (LPs committed to the umbrella structure), and the cultural DNA — the questions asked, the standards applied, the competitive intensity — was recognizably Sequoian across all three geographies. The model's promoters argued it was the venture capital industry's only successful answer to globalization. Unlike every competitor that had tried to run Asia out of Sand Hill Road and failed, Sequoia had built locally-led franchises that out-competed domestic funds on their own turf.
But geopolitics intervened. Beginning in 2020, escalating tensions between the United States and China — the CHIPS Act, export controls on semiconductor technology, CFIUS investigations, and the broader decoupling of the two technology ecosystems — made the shared structure increasingly untenable. Sequoia Capital was simultaneously backing Chinese AI companies that the U.S. government viewed as national security threats and U.S. defense-adjacent companies that the Chinese government viewed as adversarial instruments. The contradictions were not merely reputational; they were operational. Limited partners with fiduciary duties to U.S. institutions questioned whether their capital was funding Chinese military modernization. Chinese portfolio companies questioned whether Sequoia's U.S. affiliation made them targets for sanctions.
In June 2023, Sequoia announced the dissolution of the unified structure. Sequoia China rebranded as HongShan, Sequoia India/SEA rebranded as Peak XV Partners, and Sequoia Capital retained the name and the U.S./European franchise. The split was presented as an evolution; it was, in fact, the end of an experiment that had worked until the world changed under it.
The Permanent Capital Gambit
To understand the 2022 Sequoia Capital Fund — the open-ended structure that was announced with considerable fanfare and unwound with considerably less — you need to understand the structural frustration that motivated it.
Traditional venture fund economics work like this: a firm raises a fund with a ten-year life, deploys capital over the first three to five years, manages the portfolio for the remaining years, and distributes proceeds — either cash from acquisitions or shares from IPOs — back to limited partners as they materialize. The forced distribution is the key mechanism. When a portfolio company goes public, Sequoia must distribute the shares to its LPs, who then decide independently whether to hold or sell. The fund's involvement ends.
This mechanism cost Sequoia — and its LPs — staggering sums. Consider Google: Sequoia invested in the 1999 Series A, the company went public in 2004, and Sequoia distributed its shares to LPs. Those LPs almost certainly sold some or all of their Google stock in the years following the IPO. Google's stock price in 2004 was approximately $85. By 2024, it exceeded $175 per share, adjusted for a 20-to-1 stock split — a gain of more than 40x from the IPO price. The compounding that occurred after distribution was, in many cases, larger than the return from seed to IPO. Sequoia captured none of that post-IPO compounding within the fund structure.
Roelof Botha — a South African-born, Stanford MBA-educated former CFO of PayPal who had joined Sequoia in 2003 and gradually assumed the mantle of firm leadership — saw this as a structural deficiency that could be fixed with a structural innovation. Botha is precise, deeply analytical, and possessed of a quiet ambition that expresses itself in institutional design rather than public self-promotion. His career at Sequoia had produced investments in YouTube, Instagram, MongoDB, Unity, and Natera, among others — a record that earned him the credibility to propose something genuinely radical.
The Sequoia Capital Fund, announced in October 2021 and operational by 2022, was the answer. It was a registered investment company — essentially a mutual fund structure — that would serve as the permanent master vehicle for all of Sequoia's U.S. investing. Sub-funds for seed, venture, and growth would feed their portfolio companies up into the main fund upon liquidity events. Instead of distributing public shares, the fund would hold them indefinitely, allowing Sequoia and its LPs to continue compounding alongside the best companies in the portfolio. LPs could request periodic redemptions if they needed liquidity, but the default posture was permanent ownership.
The thesis was elegant. The execution collided with reality. Rising interest rates in 2022 and 2023 crushed public tech valuations, turning the public equity portfolio from an asset into a drag on reported performance at precisely the moment when LPs were most anxious about liquidity. The operational complexity of running a registered investment company — SEC reporting requirements, daily NAV calculations, compliance infrastructure — was substantially greater than managing a traditional LP-GP structure. And a number of Sequoia's limited partners, many of whom had their own liquidity needs and asset allocation requirements, were uncomfortable with the reduced control over their capital.
By early 2024, Sequoia reversed course. The public equity holdings were separated into a standalone vehicle, and the firm returned to a modified version of the traditional fund structure with some permanent-capital elements retained for the longest-duration holdings. Botha acknowledged the retreat without apology, framing it as iteration rather than failure. But the episode revealed something important about even the most elite institutional investors: the half-life of structural innovation in asset management is shorter than the half-life of structural innovation in technology, because the LPs who fund the former are considerably more conservative than the customers who adopt the latter.
The Anti-Portfolio and the Art of Saying No
Sequoia's greatest investment in institutional self-awareness may be the "Anti-Portfolio" — a page on the firm's website, maintained for years, that listed the companies Sequoia evaluated and declined to fund. The list was remarkable not for its obscurity but for its prominence. eBay. Snap. Uber. Airbnb (early rounds). Tesla. Companies that became worth hundreds of billions of dollars, and where a Sequoia partner sat across the table from the founder, listened to the pitch, and said no.
The Anti-Portfolio was not self-flagellation. It was a decision architecture tool. By institutionalizing the memory of near-misses, Sequoia forced its partnership to confront the specific patterns that led to errors of omission — which, in venture capital, are always more costly than errors of commission. What did the missed companies have in common? Often, they had founders who were unusual, markets that seemed small or stigmatized, or business models that required a conceptual leap that felt uncomfortable at the moment of decision. The Anti-Portfolio encoded the lesson: discomfort is a signal, not a stop sign.
The cultural practice of conducting "deal retrospectives" — structured post-mortems on both investments made and investments missed — became a signature Sequoia institution. These sessions were reportedly intense, even confrontational. A partner who had championed a deal that failed would be expected to stand before the full partnership and trace the decision logic back to its failure point. A partner who had passed on a company that later became a category winner would be expected to identify the specific moment where their reasoning went wrong. The purpose was not punishment but calibration — keeping the firm's collective judgment tuned to the frequency at which world-changing companies actually operate.
Scout Programs and the Extended Network
Sequoia's most influential structural innovation in the 2010s had nothing to do with fund structures or geographic expansion. It was the Scout Program — a network of operating executives, founders, and technologists who were given small allocations of Sequoia capital to make seed-stage investments independently, with Sequoia receiving the right to co-invest in follow-on rounds.
The program, pioneered initially by Sequoia but later copied by virtually every major venture firm, was a strategic masterstroke disguised as a minor operational initiative. Scouts were typically current or former founders of Sequoia portfolio companies — people who were embedded in the entrepreneurial community, had strong technical judgment, and were frequently the first to hear about the most promising new companies because they were peers of the founders building them. By giving scouts capital and incentives, Sequoia effectively extended its deal-sourcing surface area by an order of magnitude without hiring a single additional partner.
The economic structure was clever: scouts invested Sequoia's capital but received a share of the carry, aligning incentives. More importantly, the scout relationship deepened the bond between Sequoia and its most successful portfolio company founders, creating a flywheel where the best founders from one generation became the deal-sourcing engine for the next. The network effects compounded. A founder backed by Sequoia in 2005 might serve as a scout who identified a transformative company in 2012, which in turn produced a founder who became a scout in 2020.
The Succession Continues: Botha's Sequoia
Roelof Botha's ascension to managing partner in 2022 represented the third major generational transition at Sequoia, and it carried the highest stakes. Valentine had handed off to Moritz and Leone when the firm was already established but still relatively small. Moritz and Leone had handed off to Botha and a broader leadership group when the firm was at the peak of its prestige but navigating the structural experiments that would prove treacherous.
Botha inherited a firm that was simultaneously the most admired venture franchise in history and one undergoing the most turbulent period in its fifty-year existence: the unwinding of the Sequoia Capital Fund structure, the forced separation of the China and India entities, the fallout from the FTX debacle — Sequoia had invested approximately $210 million in Sam Bankman-Fried's crypto exchange, marking the entire position down to zero in November 2022 — and a generational shift in the venture landscape toward artificial intelligence that demanded the firm reposition its portfolio and its expertise at speed.
The FTX write-down was particularly bruising. It was not merely a financial loss — $210 million is significant but not existential for a firm managing $85 billion — but a reputational wound. Sequoia had published a fawning profile of Bankman-Fried on its website, had assigned a partner to write an extended narrative treatment of his genius, and had done so months before his fraud was exposed. The episode crystallized a critique that had been building in the industry for years: that Sequoia's growth-stage investing, which had expanded dramatically in the 2010s and 2020s, lacked the same rigor and pattern-recognition advantage that characterized its seed and early-stage work. The moat in early-stage venture is judgment about people and technology; the moat in growth-stage investing is access and financial analysis. Growth-stage Sequoia was competing with Tiger Global, SoftBank, and a dozen other firms on a playing field where Sequoia's advantages were less decisive.
Botha's response was characteristically methodical. He restructured the partnership, reducing the number of active partners and narrowing the firm's focus. He elevated a new cohort of younger investors — including Shaun Maguire, Pat Grady, Sonya Huang, and others — who brought deep technical fluency in AI, crypto, defense technology, and bio. And he reoriented the firm's center of gravity back toward the earliest stages of company formation, where Sequoia's cultural advantages were most pronounced.
We don't get to pick the world we invest in. We pick how we show up for the founders who are building it.
The AI Pivot and the Next Cycle
If there is a single investment that captures where Sequoia stood in 2024, it is the firm's early and aggressive positioning in artificial intelligence. Sequoia's AI portfolio, assembled across multiple funds and stages, represents one of the most concentrated bets by any institutional investor on the thesis that large language models, foundation models, and their downstream applications will reshape the global economy as fundamentally as the internet did.
The portfolio is dense: Sequoia is an investor in or has been linked to investments in several of the most prominent AI companies of the current cycle, including significant positions in the infrastructure and application layers. The firm published "Generative AI: A Creative New World" — an influential September 2022 analysis by partner Sonya Huang — that mapped the emerging landscape and became a reference document for the entire industry. It was marketing disguised as thought leadership, and it was effective because it was genuinely thoughtful.
But the AI cycle also presents the hardest version of the question that has always defined Sequoia's existence: when a new technology platform emerges, who captures the value? The semiconductor layer (NVIDIA)? The model builders (OpenAI, Anthropic, Google DeepMind)? The infrastructure layer (cloud providers)? Or the application layer, where Sequoia has historically found its biggest winners? The firm's strategic bet — and it is explicitly a bet, not a certainty — is that the application layer will once again produce the dominant outcomes, just as it did in the internet era when Google, Amazon, and Facebook captured more value than the router manufacturers and hosting companies that preceded them.
The risk is that AI's economics may not follow the internet's precedent. Foundation models require billions of dollars in capital expenditure, concentrating power in a small number of extremely well-funded entities. If the model layer captures most of the value — if OpenAI becomes the Google of AI, owning both the infrastructure and the primary user interface — then Sequoia's application-layer thesis will underperform, and the firm's multi-billion-dollar AI portfolio will generate good but not exceptional returns.
A Redwood's Rings
In the lobby of Sequoia's offices on Sand Hill Road — an understatement of a building, intentionally modest, because Valentine believed that ostentation in a fiduciary's office was a signal of misaligned incentives — there is a cross-section of a redwood tree. The rings are labeled with dates corresponding to the company's founding, key investments, and generational transitions. It is hokey. It is also accurate. Redwoods survive because their root systems are interconnected, because they grow slowly, because they are adapted not to any single season but to the compounding logic of deep time.
Sequoia Capital, as of late 2024, manages approximately $85 billion across its remaining U.S. and European operations, has a portfolio that includes some of the most valuable private companies on earth, and is led by a partnership that is younger, more technically fluent, and more focused than at any point in the past decade. The firm's brand advantage — the Sequoia name on a term sheet remains the single most powerful signaling device in the venture industry — is intact but no longer uncontested. A new generation of firms — Founders Fund, a16z, Thrive Capital, and the growing class of solo capitalists — has eroded the oligopoly that Sequoia, Accel, Benchmark, and Kleiner once shared.
What has not been eroded is the institutional memory. Somewhere in Sequoia's files — in the partner meeting notes, the deal retrospectives, the Anti-Portfolio — there is a record of every major technology wave of the past half century, analyzed in real time by people who were writing checks into it. That record is not a guarantee of future performance. But it is, arguably, the densest concentration of applied pattern recognition in the history of capital allocation.
On Doug Leone's last day as an active managing partner, he reportedly gathered the junior partners in a conference room and told them a story about Don Valentine interviewing a young entrepreneur in 1978. The entrepreneur was nervous, unkempt, and asked for money to build something that didn't exist yet for a market that nobody could measure. Valentine, according to Leone, asked exactly one question: "How big is this market going to be?" The entrepreneur said he didn't know. Valentine invested anyway — the only time anyone could recall him leading with instinct over analysis. The entrepreneur was Steve Jobs.
The cross-section of the redwood in the lobby has been there for decades. Nobody has ever thought to replace it.
