Hi, Tech Editor Alexei Oreskovic here, pitching in for Allie today.
TL;DR
- Sequoia's Roelof Botha advises founders to delay funding for 12 months for better valuations.
- Botha describes Sequoia as "mammalian" in its VC approach, focusing on fewer, nurtured investments.
- He supports US industrial policy only when countering strategic foreign nation-state competition.
- Botha acknowledges tradeoffs with partner Shaun Maguire's firm stance and recent controversy.
Sequoia announced two new funds, which manages a $200 million seed fund and a $750 million venture fund, had Managing Partner Roelof Botha speak at the TechCrunch Disrupt conference held in San Francisco on Monday.
During a past speaker at Coins2Day’s Brainstorm Tech conference, Botha shared some notable insights regarding the VC sector, Trump's industrial strategies, and a specific recent Sequoia dispute. Here are some of his remarks that caught attention.
On the current funding environment and the near-term outlook:
My contention is that if you, as a founder, can avoid seeking funding for a minimum of a year, you're likely better off focusing on development, as your company's valuation will significantly increase over the next 12 months compared to potential market fluctuations during that time.
If you're looking to secure funding six months down the line, it's advisable to move your fundraising plans up to the present. The current market conditions are quite robust, and there's a significant possibility that the market might not be as favorable in half a year.
On VC reptiles versus mammals:
“We are more mammalian than reptilian. We don’t lay 100 eggs and see what happens. We have a small number, just like mammals give birth to a small number of offspring, and need to give them a lot of attention.”
On the U.S. Government taking equity in companies like Intel:
“I’m a libertarian free market thinker by nature. I think industrial policy generally only has a place if it’s in response to things that are of national interest. So the only reason the U.S. Is resorting to this is because we have other nation states with whom we compete who are using industrial policies to further their industries that are strategic and maybe adverse to the U.S.’s long-term interests.”
On getting it wrong:
“The first time I made an investment that was a complete write-off, I literally cried in the partner meeting. I was so embarrassed and I felt so guilty that I’d lost money.”
And finally, last week's FT report saw Sequoia COO Sumaiya Balbale resign following posts by Sequoia partner Shaun Maguire which she deemed Islamophobic:
“As a matter of routine we don’t comment on personnel matters. Sumaiya did great work for five years and I appreciate everything she contributed to us. On Shaun, I think he has made it clear what he stands for, and there’s a particular set of founders for whom it is very appealing that he’s been as firm in his opinion. Does it come with tradeoffs? Yes it does.”
Alexei Oreskovic
X:@lexnfx
Email:[email protected]
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