The Exchanges

Q Did you see the roadshow? Did you go to any of the roadshow? I heard there was like a long product demo there, which is kind of uncommon.

A Um, yeah. So I think it's, I think this is true for, you know, uh, many CEOs, but especially for Dylan, like Dylan, Cares a lot about the product and it's important that everybody who is considering investing in the company really knows what figment, not just what figment stands for and design and creativity and all the things you see, but really how the product works. Um, and it was not a five minute flyby, you know, look at the cool, you know, shiny features. The product demo was, you know, they were in the weeds. Um, it was, yeah, I was, uh, I, in fact, uncovered parts of the product I didn't know existed. Um, but it was good. I think it's important, again, like part of, you know, that's who Dylan is, right? He actually cares so deeply about every single pixel and every single feature, and then that shows through.

AI assessment note: “it was not a five minute flyby... The product demo was, you know, they were in the weeds.”

Q boards sort of broadly, you've sat on a ton of different boards, even board director at a number of important companies. Like, do you have a playbook and a system now that you come in and you say like, you know, you know, Kind of grab the reins or like, what does that even look like? What is, what is partnering with you look like at, at the board level?

A Every, um, you know, every situation is just like, you know, every good board is, you know, is, you know, the same and every bad board is bad and so ununique, um, and unhappy way. Uh, no, I think like the, uh, in general, A paint by numbers approach to anything in technology and anything in investing is bad. Um, 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 playbooks age very quickly, especially in a world of accelerating change. So I think the first thing you have to do when you join a board is just take the time to learn what business you're actually in. And I think this is one thing that, um, I've found is you, you can get to a pretty good sense of a company and its market, um, You know, at the end of your diligence process when you're writing the memo, but, uh, you haven't seen the people in that company respond to adverse events. You haven't seen what the real bottlenecks in the business are and you can have opinions, but you sort of, um, uh, it's much more easy to feel those opinions when you have dollars at risk. So I think in general, the first thing I try to do is like, just figure out what business we're actually in and where the bottlenecks actually are. Um, I think one thing I like to do pretty soon after leading an investment is, uh, do an executive…

AI assessment note: “A paint by numbers approach to anything in technology and anything in investing is bad.”

Q Can you talk a little bit about, uh, paths to venture? You mentioned that in your analyst class, there is the high startups maxed out on startups versus maxed out on finance. Are both of those paths still viable today or have they shifted over time? How do you think about hiring new people?

A I think with venture, um, and it's funny, I read, and you know, I do, I help lead Sequoia's growth stage investing business, so like venture, like true venture, you know, seed, it's a different thing. Um, from my perspective, Uh, 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. Like, you can divide the job into, you know, sourcing, picking, winning, and company building. Like, those are probably the core, the four core competencies. What we try to do, or at least what I try to do is I want to find somebody who can really hit the ground running on one of those things. So with finance, you'll have people who come in and, you know, they can be really good on the, you know, the picking, like the investment, uh, the investment process, due diligence, have a real point of view on why a company should succeed. But maybe you've never taken a meeting before one-on-one with anybody in your life. You know, for me, that was me. Like when I joined Sequoia at Goldman, I was the, you know, headphones on behind the Excel sheet, you know, like that was, I literally had never done a one-on-one meeting before in my life. And I got to Sequoia, I turned to, uh, Doug and I said, Doug, you know, like, is there like a sector you want me to cover? And Doug lo…

AI assessment note: “it sort of doesn't matter at all what you did before”

Q Did you, did you know, did you, did you, was that, was that your guess early on? Did you, did you, did you fully see that the, that the TAM for this was not, Like, how many designers are there and just, like, add it up and multiply it? Uh, did, did you, I imagine you believe that it could be used across?

A It's, it's, it's, it's, it's similar to what I was saying with the, you know, I think the creative technologist archetype who's gonna do a lot of things and eventually, in 10 years, the way that companies run their product engineering teams will probably look very different. I think similarly, like, their worst, there were even, you know, predating our investment, there were definitely examples of teams that went all in on the Figma way, collaborative way of building products. And you had, you know, full product engineering design teams at small companies or even at midsize companies. I remember Airbnb and Square were in our portfolio and we talked to them before we invested and they were, you know, early at pioneering this, you know, we're getting off of the Dropbox links being sent around and we're, you know, we're going all in on, on, you know, working in Figma. And it turns out it was a much better way of shipping products if you wanted to ship really good products quickly and therefore the entire world seemingly, um, changed its mind. In a few years.

AI assessment note: “predating our investment, there were definitely examples of teams that went all in”

Q up at the top of the cap table. Uh, has that been Something that's been kind of a drumbeat internally, or has there ever been like a moment when it's been kind of harder to establish that foothold because of like crossover investors coming in or overpaying or valuations or anything like that? There's the WhatsApp example, which is like really famous, but I'm sure there's a million others, right?

A Yeah. I think our, you know, our North star, we want to be the largest outside shareholders in the most important companies of tomorrow. And, um, It would be amazing if we were the seed investor in every single most important company of tomorrow. Um, and we actually do a decent job of that. Um, and if we don't do the seed, we try to do the series A. If we do do the seed, we'll often try to do the series A. Um, and at any given round, you know, there's a relative risk reward and, um, and also like, you know, we can't, um, We can't forget that we're in the, you know, net multiple of money business, right? We're focused on investment returns, and if, you know, being the fourth biggest investor of the most, most, most important company is a good investment, we'll do that too. But I think the ability to Um, double down and triple down on companies that we really believe in and hold them for the long term. Like that, that's the, the other thing that, um, you know, often gets lost is, is, you know, there's a famous example of like Sequoia and Apple. Like, do you guys know how much money Sequoia made on Apple? No. Okay, well, I'm not going to tell you, because it's, it's, it's not nearly as much as you might think. Um.

AI assessment note: “our North star, we want to be the largest outside shareholders”

Q memo that went out right as the market was collapsing. I believe this was during the housing crash. And it's this really deep macro econ analysis of what's going to happen. And I'm wondering if, is that macro DNA still alive and well at Sequoia? Do you guys still look at consumer confidence and what's happening in the credit markets and all of that, or is that less relevant today?

A No, it's, um, you know, Sequoia is a interesting, uh, business, you know, in the sense that there is, um, people talk a lot about, you know, multi-stage VC firms and what that means. And, you know, Sequoia, we have this, you know, thriving seed and early stage business that was sort of the heart of Sequoia dating back to the 1972. Um, and, uh, you know, a growth equity business that spans series B's up through crossover Uh, um, crossover investing into the public markets. We have this overlay Sequoia Capital Fund vehicle, um, which is the permanent capital, uh, behind all of these funds. We have Sequoia Heritage, which is a multifamily office, um, that is, you know, it's a, it's this independent business affiliated with Sequoia. We obviously, you know, we see them all the time. Sequoia Capital Global Equities, which is, I think at this point, the largest TMT long short hedge fund in the world. Um, So you, you know, put all that together, it's, you know, uh, one of the benefits we have, I think, um, you know, for being quote unquote multi-stage is you get, you know, different bites at the apple as companies scale and, you know, you try to catch everything at the seed and if you miss a few, you can do the A and et cetera, et cetera. But also you do turn, you know, it's hard to really lose your mind on things if you have the forcing function of the public markets, you know, around…

AI assessment note: “it's hard to really lose your mind on things if you have the forcing function”

Q career, just broadly of a company that, where that is an important factor in Kind of their longterm strategy. I've always, I've generally, the meme has been like, stay private as long as possible, but you know, there's a reason companies go public. There are obviously tons of benefits, but, uh, what, what, what are the, what is the M and a dynamic in public and private markets right now?

A Yeah, I think the, you know, there's what you learn when you start out at Goldman Sachs and it's, you know, it's, you have access to the capital markets, you can use a public currency for M and a, you know, blah, blah, blah. You tell your story to me. The, um, the, the reason why I'm so happy with the IPO timing today is coming off of config a few months ago, and just like feeling the energy, you guys were there, you felt the energy amongst the community, like the incredible community surrounding Figma. Um, and then being able to tell that story and all the stuff we're doing with our new product initiatives with AI and tell it to the broader world. Um, you know, in the S one we reported, I think, thirteen million monthly active users, two thirds of which are not designers. And, um, you know, they got.

AI assessment note: “you can use a public currency for M and a, you know, blah, blah”