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Sequoia Capital

Sequoia Capital

Sequoia Capital is a venture capital firm that has invested in companies like Google, Apple, Cisco, YouTube, AirBnB, and WhatsApp. The firm was founded in 1972 by Donald Valentine, and companies backed by Sequoia have created over $3.3 trillion dollars in market capitalization.

Sequoia Capital is a California-based venture capital firm headquartered in Menlo Park, California, which was founded in 1972 by Donald Valentine. It has an aggregated public market value of over $3.3 trillion, 1244 investments, 251 exits, and 22 investment funds with a total of 15.3 billion in raised capital (as of July 2019). Sequoia Capital has offices operating in the United States, Israel, China, and India.

The company aims to invest early in companies that it deems to be "dentmakers," with the intention to aid with growing them. It invests in seed funds and helps the start-ups with the initial stages of growing a business, such as hiring engineers, product development, strategy, and introducing early customers.

It also partners with established companies that are looking for step-function growth. Sequoia Capital utilizes a scout program in which individuals are financially backed by the company and expected to invest in early-stage start-ups so Sequoia Capital can have an advantage when larger funding rounds occur. There are several hundred scouts working for the company, and the scouts have the benefit of keeping a portion of the profits from the companies in which they invest Sequoia Capital's finances.

History

Donald Valentine founded Sequoia Capital in 1972. The firm participated in Apple's initial public offering in 1980 and made early investments of other companies that would later provide great returns for the company, such as Oracle, Cisco, Yahoo, Google, and LinkedIn. Their investment success led them to having a $1.4 trillion combined stock market value in 2014, which was equivalent to 22 percent of the NASDAQ at the time. In 2014, nine investment partners working with Sequoia Capital made it onto the 2014 Forbes Midas List, which recognizes the world's top 100 technology investors. This was more than any other venture capital firm in the world. The nine Sequoia Capital partners making the 2014 Midas List were James Goetz (#1), Doug Leone (#6), Michael Moritz (#13), Alfred Lin (#26), Roelof Botha (#29), Neil Nanpeng Shen (#33), Michael Goguen (#44), Bryan Schreier (#72), and Kui Zhou (#81).

Investments

Sequoia Capital is structured as a limited liability company, in which investors contribute money to a fund that the firm's general partners utilize to invest in business ventures. These partners have included university endowments, charitable foundations, and other large institutions. The firm invests in seed-stage, early-stage, and growth-stage investments in private technology companies. Sequoia has been recognized for the firm's track record in early investments, with 2019 seeing Sequoia having more new seed-stage investments than Series A deals. In the same year, Sequoia was identified as a top unicorn investor, with investments in one of five of all private companies valued at $1 billion or more.

In the United States, Sequoia-backed companies account for more than 20 percent of NASDAQ's total value. Industries in which the company invests include energy, finance, enterprise, healthcare, internet, technology, and mobile. Sequoia Capital also invests money on behalf of non-profits and schools, such as the Massachusetts Institute of Technology. The company has branches in various parts of the world, including China, India, and Israel. It has had three global growth funds, and the one in 2018 had a five-year investment horizon. The minimum investment to join a global growth fund is $250 million.

Sequoia Capital

Sequoia Capital's branch in the United States primarily makes investments primarily in software, internet, mobile, enterprise, information technology, and e-commerce. They have raised approximately 15.3 billion in funding held in twenty-two (as of July 2019) different funds since their founding in 1972.

Sequoia Capital China

The company branch in China was founded in September of 2005, and its managing partner is Neil Shen. Sequoia Capital China has 31 different funds with $3 billion in total capital, 398 investments, and 51 exits (as of July 2019). The company invests in industries such as logistics, drones, biotechnology, autonomous driving, and bike-sharing. It also invests globally in eight countries outside of China. Sequoia Capital China has offices in Shanghai, Beijing, Hong Kong, and other cities throughout China.

Sequoia Capital India

Sequoia Capital India was founded in 2000, with a Southeast Asia branch following in 2012. Its managing director is Abheek Anand, who manages along with multiple other directors. This branch of the company focuses on technology, consumer, and healthcare start-ups. The branch has made 314 investments and 31 exits. It focuses on investments that are connected to internet users, as India has one of the highest amount of users in the world and that number is continuously growing.

Sequoia Capital Israel

This subsidiary of the company was founded by Haim Sadger in 1999.The Israel branch of Sequoia Capital has made 151 investments and 32 exits. The branch invests primarily in software and enterprise software with a focus on information technology infrastructure and network security.

Restructuring funds

Announced in October of 2021, Sequoia Capital debuted a shift in their strategy for their investment funds' structure and the timelines for those funds to return capital. This came as Sequoia Capital felt the venture capital industry had not changed since the 1970s and they needed to adapt to the change with the industries they invested in. As part of the change, limited partners invest in The Sequoia Fund, an open-ended liquid portfolio composed of public positions in a selection of enduring investments. The fund is also meant to allocate capital to a series of closed-end sub funds for venture investments in companies, with Sequoia Capital committing that these investments would continue to come at any stage of a company.

This change affects the firm's US and Europe-focused funds, with India and China-centric funds not adopting the structure. Further, the change means the new funds will not be committed to ten-year return cycles, which Sequoia Capital, in their release on the change, led investors to liquidate holdings in public companies based on set timelines rather than on determinations of when an investment had fully matured. The new fund removes the imposed expiration dates and is intended to reduce the pressure on investors to exit opportunities prematurely. The change is also intended to create a feedback loop, in which returns from start-up investments can return to the central fund to be redeployed into future investments, to further investor incentives with founders.

Registered financial advisors

As part of the announcement on Sequoia's restructured funds, the firm also announced they had become registered financial advisors (RIA), joining firms such as General Catalyst and Andreessen Horowitz, which also became RIAs contemporaneously to Sequoia's change. This gives the firm more flexibility when backing non-traditional assets outside of private markets, which in turn can allow them to better adjust to market trends, such as backing public companies during periods of public debuts and investing in capitalization trends such as initial coin offerings.

Timeline

March 9, 2022
EthSign raises $12 million in stable coin led by Sequoia Capital India, Mirana Ventures.
March 9, 2022
Sequoia ramps up focus on Latin American start-ups after recent successful investments in start-ups in the region.
March 7, 2022
Sequoia-Backed Indian financial technology start-up CredAvenue becomes an Unicorn with $137 million investment.
March 7, 2022
tabby raises $54 million from Sequoia Capital India and STV.
March 4, 2022
Apollo.io raises $110 million in funding led by Sequoia Capital.
February 25, 2022
American VC Sequoia Capital to raise $2.8 Billion for Indian and Southeast Asian start-ups.
February 16, 2022
Sequoia Capital to create crypto fund of as much as $600 million.
February 7, 2022
Sequoia leads $450 million investment in Polygon blockchain.
October 26, 2021
Sequoia dramatically revamps its fund structure as it looks to rethink venture capital model.
August 21, 2018
Successfully raises the Sequoia India and Southeast Asia Fund.

Invested in

Associated investment funds

Patents

Funding Rounds Participated In

Further reading

Title
Author
Link
Type
Date

How Does Sequoia Invest?

GrowthList

Web

How Roelof Botha became one of VC's most powerful people

Biz Carson

Web

February 8, 2022

Sequoia Capital investor portfolio, rounds & team

Dealroom.co

Web

Sequoia Capital just closed a giant new seed fund -- and here's how it works

Connie Loizos

Web

January 16, 2018

Sequoia India eyes a separate $200M fund for Surge programme - ETtech

www.ETtech.com

Web

April 3, 2019

Documentaries, videos and podcasts

Title
Date
Link

Billionaire Michael Moritz: Investing, Sequoia and Leadership

May 22, 2018

Cobalt Robotics + Sequoia: Why now?

July 11, 2018

Conversation on Philanthropy with Bill Gates and Sir Michael Moritz

November 13, 2014

Don Valentine, Sequoia Capital: "Target Big Markets"

October 11, 2010

Finding the Next Silicon Valley with Doug Leone (Sequoia Capital) | Disrupt SF

September 6, 2018

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News

Title
Author
Date
Publisher
Description
FinSMEs
September 30, 2021
FinSMEs
About | Advertise | Contact | Disclaimer | News | The Daily Deal Newsletter FinSMEs.com by FinSMEs is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
Connie Loizos
September 9, 2021
TechCrunch
Earlier today, we joined friend and former colleague Jon Fortt of CNBC in interviewing partner Pat Grady of Sequoia Capital, and it proved a wide-ranging conversation (we wound up blabbing for an hour, which was not always the plan). You can check out the video below but we thought there were some highlights worth pulling [...]
FinSMEs
September 7, 2021
FinSMEs
About | Advertise | Contact | Disclaimer | News | The Daily Deal Newsletter FinSMEs.com by FinSMEs is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
FinSMEs
August 24, 2021
FinSMEs
About | Advertise | Contact | Disclaimer | News | The Daily Deal Newsletter FinSMEs.com by FinSMEs is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
Mike Butcher
August 17, 2021
TechCrunch
Enterprise Resource Planning systems have traditionally been the preserve of larger companies, but in recent years the amount of data small to medium-sized businesses can generate has increased to the point where even SMEs/SMBs can get into the world of ERP. And that's especially true for online-only businesses. At the beginning of the year we [...]
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References

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