Mar 28, 2025 · 28m · tbpn
Andrew Reed on Sequoia and How to Be a World-Class VC
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Sequoia Capital partner Andrew Reed discusses the fundamentals of top-tier venture investing, exploring Sequoia's apprenticeship culture, power-law portfolio concentration, boardroom governance, and strategies for evaluating generative AI startups.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 23.7% of the talking time here. How this is scored →
The hosts as informed peer 3.2 Guest teaching 2.7 Guest disagreement 1.2 The hosts pushing back 1.0
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:53 Andrew dismisses paint-by-numbers board playbooks
Andrew strongly rejects the premise of applying pre-packaged executive playbooks to startups, calling it the hallmark of the worst board members.
Hardest push from the hosts ▶ 11:24 John challenges Black Swan memo macro depthJohn presses Andrew on why Sequoia's 2020 Black Swan memo felt noticeably lighter on macroeconomic rigor compared to the 2008 financial crisis memo.
Biggest teaching moment ▶ 17:24 Andrew reveals Sequoia's modest Apple gainsAndrew surprises the hosts by revealing Sequoia only made single-digit millions on Apple, using the fact to educate them on the necessity of long-term holding.
The host holds their own ▶ 11:24 John highlights RIA regulations and macro shiftsJohn demonstrates domain expertise by questioning whether RIA structure changes or rapid market tempo altered Sequoia's macro research approach.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| Harry Stebbings Tweet and Sequoia Internal Standards | 3 | 2 | 1 | 1 | The hosts open by quoting Harry Stebbings' praise and asking Andrew about his background. Andrew self-deprecatingly recounts joining Sequoia and learning under senior partners. | |
| Overcoming Self-Doubt and Building an Online Persona | 2 | 1 | 1 | 1 | Jordi asks about handling self-doubt early in venture. Andrew explains how he leveraged Twitter in 2017 to build founder relevance despite his youth. | |
| Macroeconomic Analysis and Sequoia Crisis Memos | 5 | 3 | 1 | 2 | John demonstrates familiarity with Sequoia's historical crisis memos and asks whether macroeconomic analysis remains core. Andrew explains Sequoia's multi-vehicle structure and how market discipline informs their strategy. | |
| Board Governance Philosophy and the Shock Absorber Role | 3 | 4 | 2 | 1 | Andrew dismisses formulaic board playbooks, arguing that rigid systems fail in changing environments. He outlines the shock-absorber mindset necessary during both euphoric and stressful board cycles. | |
| Portfolio Concentration and Long-Term Compounding Strategy | 5 | 4 | 1 | 1 | John raises Sequoia's concentration strategy and ownership targets, referencing WhatsApp. Andrew illuminates their philosophy by noting their modest dollar returns on Apple due to early exit versus compounding in Google. | |
| Silicon Valley Ethics and Partner Meeting Consensus | 3 | 3 | 2 | 1 | Jordi inquires about balancing competition with co-investors and internal partner dynamics. Andrew describes Sequoia's high-intensity culture, framing them as transparent 'front stabbers' operating under high performance bars. | |
| Core Competencies and Apprenticeship in Venture Capital | 3 | 4 | 2 | 1 | John asks about career backgrounds leading into venture capital. Andrew counters that prior experience barely prepares anyone for VC, breaking the discipline into core competencies developed through long apprenticeship. | |
| Underwriting Generative AI and Universal Distribution | 4 | 3 | 1 | 1 | Jordi asks how Sequoia underwrites generative AI given transient revenue spikes. Andrew points out that universal day-one distribution makes AI revenue ramps faster than any prior technology cycle. | |
| Episode Conclusion and Future Invitations | 1 | 0 | 0 | 0 | The hosts conclude the interview with compliments and extend an open invitation for a future joint episode with Dylan Field. |
Statements from this episode (13)
Reed: Doug Leone Made a $3B Gain on the Wiz Deal
“I think on Wednesday of last week was in the whiz deal was announced. And, you know, yet another three billion dollar gain for Doug Leone.”
Reed: Sequoia Capital Global Equities is largest TMT hedge fund
“Sequoia Capital Global Equities, which is, I think at this point, the largest TMT long short hedge fund in the world.”
Reed: Public market exposure prevents VCs from losing valuation discipline
“It's hard to really lose your mind on things if you have the forcing function of the public markets, you know, around the corner every single day.”
Formulaic Playbooks Create the Worst Tech Board Members
“A paint by numbers approach to anything in technology and anything in investing is bad. And I think the worst board members tend to try to be the people who come in and take the reins and run their play, run that company through their playbook because playbook…”
Reed: Running executive searches together aligns investors and founders post-deal
“I think one thing I like to do pretty soon after leading an investment is do an executive search with the founder. I think it's like a very nice way to get from the opposite sides of the table when you're negotiating an investment. You know, the first thing yo…”
Reed: Effective board members act as emotional shock absorbers
“And then there's this concept that Roloff talks about a lot of being a shock absorber on the board, which is something that I really, really believe in. You know, when things are going well, many board members love to do the rah-rah cheerleading board meetings…”
Reed: Sequoia Made Single-Digit Millions on a 40x Return in Apple
“It was, in the single digit, I think it was, I think Sequoia made a 40 X on a 150 K. . Wow. So single digit million dollar gain”
Reed: Silicon Valley is ethical; bad behavior comes mostly from outsiders
“By and large, people are, like, good and ethical in the Valley. Like, it's a pay it forward place. It's a repeat game. I think there's a reason why a lot of the, you know, bad behavior comes from people who aren't from Silicon Valley.”
Sequoia Acts as Cutthroat 'Front Stabbers' for Maximum Round Allocation
“Sequoia, you know, we are as cutthroat as it gets, right? Like we are front stabbers, you know, we'll, we'll, like, we don't hide that in general we want to do usually as much of a round as we possibly can.”
Fund Returns Are Inversely Proportional to Team and Fund Size
“Doug has this presentation, he calls it the laws of physics, where one of the laws of physics is that fund returns are inversely proportional to team size, and also fund returns inversely proportional to fund size.”
Reed: Prior experience cannot prepare investors for VC's multifaceted demands
“It sort of doesn't matter at all what you did before, because nothing you do before joining a venture capital firm prepares you for how truly, like, multifaceted long-term success is in venture.”
Reed: Many Sequoia investors start in their twenties and apprentice for years
“You know, if you look at a lot of it, a lot of the people at Sequoia started in the early twenties here and apprentice, you know, were nobodies for five, six years. And then all of a sudden people started recognizing them when they had, you know, amazing, amaz…”
Generative AI Creates Unprecedented Revenue Ramps Through Immediate Distribution
“Because of that fact, like, you know, everybody's on the internet,
All the time.
And most of these technologies are available at the get go to everybody.
you can see revenue ramps like nothing we've ever seen before, right?
because it's transformative techno…”