The Ledger
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Grady: 10 years of Sequoia data shows consensus doesn't drive startup outcomes
“So we have actual data on this going back to 20 14 where we started recording the votes numerically on every single investment. So we have about 10 years worth, which believe it or not is not conclusive because there are so few outliers that have emerged even …”
Grady: Sequoia won nearly 100% of targeted deals over the last year
“We do track this. I think it's a hundred percent in the last 12 months. Actually, I take it back. There's one situation where an existing portfolio company was raising a Series B and they chose somebody else, and To be fair, we didn't make an offer, but had we…”
Grady: Startups see 4x higher valuations in rounds immediately following Sequoia
“But if you look at the, if you look at the data, it's actually not signaling risk, it's signaling advantage. And it's signaling advantage in the sense that the average valuation for the round that you raise after your Sequoia round. So if you raise a seed from…”
Grady: Freezing current AI models would still create tens of trillions in value
“I don't know if the data supports this or not, but I think that even if you were to freeze the capability set of the current foundation models and turn all of your attention to optimization and tuning and developer ecosystem, it would revolutionize trillions o…”
Sequoia investment decisions always end with full partner consensus
“And so at Sequoia, rarely do investment decisions begin with consensus. It's usually a couple of People who see something special, but they always end with consensus because by the time we invest, we want it to be a team Sequoia investment, not an individual's…”
Grady: VC hiring will swing back toward younger apprentices within 10 years
“My personal view, I think the pendulum in the last five years has shifted towards wanting founders and operators as VCs. I think in the next five or 10 years, it's going to swing back the other way towards Hiring younger people with fresh perspective and more …”
Grady: Big Tech will be the biggest beneficiary of the next platform shift
“In the next platform shift, that will also be true. The biggest beneficiary is likely to be Google or Facebook or Apple or Amazon.”
Grady: Sequoia never fires or promotes investors over a single deal
“You will never see anybody at Sequoia reprimanded, fired, chastised for a failed investment. You will never see that. Similarly, you will never see anybody at Sequoia Promoted, lauded, praised for a single great investment.”
Grady: Sequoia's internal data platform predicts which founders to meet
“We do want it to get to the point where it can tell us whether or not we should meet a company. And it got to that point a year or two ago.”
Grady: Sequoia made $1B+ more on Palo Alto Networks by holding longer
“Or Palo Alto Networks, where we went into that IPO with the exact same ownership position as one of our co-investors. We ended up generating More than a billion dollars more than them because we were more patient, and so sometimes it really pays off.”
Grady: Next software wave will be driven by design-data feedback loops
“Now, I think the next generation of great software will actually embrace what the cloud enables you to do, and it won't be a business model transition. It'll be a user experience transition. And specifically, I think for that next generation, the companies tha…”
Grady: Silicon Valley's share of global innovation has steadily declined for decades
“Silicon Valley's slice of that pie has been decreasing monotonically for the last 40 or 50 years.”
Grady: Figma had $4.6M ARR at Sequoia's Series C
“So the series C and Figma, when Figma had, I think, 4.6 million of ARR, that was not at all obvious, but Andrew had spent three years Studying the design market and had a real point of view.”
Grady: ServiceNow generated $20M free cash flow on $25M ARR in 2009
“The very last slide showed that they were generating twenty million of free cash flow. And that was on twenty five million of ARR because they were getting paid in advance for two and three year contracts.”
Grady: Sequoia invested $52M for 20% of ServiceNow at $260M valuation
“We invested fifty two million for 20%. And for anybody keeping track, that is two 60 post on twenty five million of ARR generating twenty million of cash.”
Grady: Sequoia screened 9,000 candidates to hire Andrew Reed and Matt Huang
“Andrew Reed, Matt Huang both started on our team in February of 2014. And so the process that led to them was conducted over the back half of 2013. And it was about the most rigorous hiring process we've ever had. Like top of funnel was 9000 and what came out …”
Sequoia would operate unaffected if any individual partner left, says Grady
“Any one of us could disappear tomorrow and Sequoia would go right on and be fine.”
Sequoia is the Ford Foundation's largest institutional investment relationship
“We are the longest standing and largest relationship for the Ford Foundation in terms of where their money comes from with the returns that we generate for them.”
Okta had just $3M ARR when Sequoia invested in its Series C
“So when we did invest in Okta, it was the series C and Ben Horowitz and Anil Bushri were already on the board. So we were a little bit late to the party, but even at the series C, they had three million of ARR versus consensus for this year says 500 plus.”
The US trucking market is double or triple total software revenue
“First, self-driving trucks or trucking in the US is a massive market. It's like two or three times the total size of the software market in terms of revenue dollars.”
Grady: Zoom founder Eric Yuan required nine visa applications to enter US
“Eric Yuan, as the legend goes, it was his ninth visa application that finally got him into the US, right? Like, he was seeking out a better opportunity for himself, and he stuck with it because he really wanted to see it through.”
Grady: Sequoia grew its investment team from 14 to 27 over 17 years
“When I joined 17 years ago, we had 14 investors, today we have 27, and so that's less than a two x over, you know, 17 years.”
Grady: Sequoia expanded platform operators from 2 to nearly 60
“When I joined, we had two people that I would call kind of front office operators. So not compliance, finance, all that good stuff, but Two people, one in marketing and one in talent who were there to amplify the efforts of investors and serve the portfolio. T…”