SPEAKER_00: Hey, everybody, we have an amazing episode for you today. Sequoia Capital is the greatest venture capital firm of all time. It's indisputable. And today we have the leader

SPEAKER_01: who has shepherded the firm for four decades, from the 90s to the 2000s, 2010s, and now into the 2020s. It's an incredible episode. It'll be a top five episode of all time for this week in startups, I predict. And without further ado, Doug Leone from Sequoia. This Week in Startups

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SPEAKER_06: Hey everybody, welcome to this week in startups. Really excited to have our next guest on. Doug Leone

SPEAKER_08: is the global managing partner of Sequoia Capital. And he's been at Sequoia since 1988. When I graduated high school, I got to meet him as an entrepreneur, uh, and be a scout for Sequoia when they started their scouts program. And he has been, uh, well, just an amazing force in venture capital, especially on international expansion, uh, and supporting some of the greatest founders, uh, in the history of capitalism, uh, full stop. You guys know all the companies that Sequoia has backed. And we've got a

SPEAKER_09: great hour with Doug today to talk about what he's learned about entrepreneurship, venture capital.

SPEAKER_11: Welcome to the program, Doug. Thank you. And thank you for reminding me that you were graduating high

David Friedberg: school when I joined Sequoia Capital. It's a nice start to a podcast. Yeah. I mean, things have changed dramatically. I think over, uh, the past couple of decades, it seems like the last decade has been

SPEAKER_17: particularly, uh, particularly has changed. What was venture capital like in 1988 when you joined and

SPEAKER_18: what drove you to join Sequoia? Uh, back in the seventies, even before I joined and in the eighties, we were building the infrastructure or what is not called the internet. We were building semiconductors. We're building systems. We're building networking. So it was truly a technology investment business.

SPEAKER_19: And in those days you were not backing 22 year olds. If you're building a chip, you don't want to back someone who's never built a chip. What you want to back is a Cisco engineering manager who's built four chips. So the founders were a little older. The R and D cycles were a little longer. There was really no need for seed investing. What can you do with a seed investment if it takes you 15 months to build a chip? So there were no seed investors. The founders were a little older. And if something wasn't working out with a founder, co-founder, you could not repot the founder, co-founder, like you can. Now a CEO can become at a product. A CEO can become chairman and move back to CEO in the case of Larry page. In those days you couldn't have that. Uh, and so it was much more to the point the words used were quite different. Uh, you know, it was two by fours to soften somebody. Uh, it was no diversity conversation. Uh, it was really more hardcore. It just reflected the general business in overall the other parts of America. And that was the case until in my mind, until

SPEAKER_18: Netscape went public in, I believe 1995, where we became interconnected and connectivity allowed for new business models that only continued through the iPhone. And new business models led to creative

SPEAKER_19: ideas, which led to younger founders, which led to low cost computing, which led to weekend prototypes, which led to seed investments, and which led to the generation of founders that we see now,

SPEAKER_18: that tend to skew a bit younger. Uh, and the market caps we saw in consumer investing that we never saw in technology investing. So the exits got way bigger. Though all American economy, they discovered technology everybody came in, uh, prices didn't matter. Everybody made the calculus that if you pick them right, it doesn't matter what price you pay, bad habits in running business. And you saw the evolution where we are right now, or maybe where we were three months ago until this market adjustment, which was the great race to zero returns. And that poses a whole new set of challenges by that whole evolution

SPEAKER_19: happened since I joined the business in 1988.

David Friedberg: Amazing change over 30 years. And here we are where people think valuations don't matter. Entry price doesn't matter. Governance doesn't matter. These things seem to be alarm bells for anybody who's been doing this for, you know, even a couple of years. So I've been doing it from a decade when you guys gave

SPEAKER_08: me my start as one of the first Sequoia Scouts. Thank you for that. And we'll get into the Scouts program.

David Friedberg: So when we look at today's market and you see, uh, folks raising party rounds, no governance, raising, you know, $10 million on a $50 million valuation without a prototype or a deck even,

SPEAKER_26: maybe they've just written a memo about what they're going to do. How much does this concern you?

SPEAKER_18: The thing that really concerns me from the founder standpoint, then I'll show concerns from the venture standpoint, but the founders are truly the head of the dog from the founder step standpoint is you start building these habits, words like doesn't matter. You know, they're trap words. Uh, founder friendly. You want to talk about founder friendly, the ultimate trap word. It's like when you meet someone, they call you buddy. Uh, that's what found the friendly says. I like to say we're founder focus. We'll become friends over time, but we're founder focus. That concerns me because bad habits start being built. And I've never been involved with any startups that has had a rocket launch launch with no bumps. And unfortunately, these bad habits really come home to roost. When you have a little bump, suddenly cash matters, habits matters, the type of people you hire matter, all the things that didn't matter suddenly matter. So it concerns me

SPEAKER_19: a whole bunch from the founders. And to me, the vignette in my mind is the founder who does a whole bunch of safes, i.e. free money. And one day they finally find their spouse, i.e. the venture investor with whom now they're going to spend the next 10 years. They do a quick calculus. Maybe the venture investor wants to own 15%, 20%, not egregious, not 40, 50. And all these safes calculated to the founder having lost 54% of his or her company after the series, a completely breaks my

SPEAKER_18: heart. And so it concerns me a ton from the entrepreneur side. It also concerns me from the investor side, because quite frankly, the best relationships are win-win. Founders have to win,

SPEAKER_19: investors have to win. And if the investor gets squeezed to 9%, 8%, 7%, what you're going to find is the great people that want to bring it, bring it, bring the value, bring the work, and so on, they look undifferentiated to the founders, the ownership is undifferentiated, and the business models are destroyed. And you know, Jason, that a company when they start, they don't have a lot, a little brand help from Sequoia, a little credibility, if only that can help to recruit. And if the founder loses that, and it's just us, there's many great firms, I shouldn't say many, there's a handful, then the uphill climb is even worse. And so I think it turns a win-win into a lose-lose.

SPEAKER_29: So actually, it concerns me quite a bit. Yeah, it does seem that this trend of not having

David Friedberg: governance, and doing these party rounds, and nobody leading means nobody has skin in the game. And I think, well, you know, my relationship with Sequoia and what I saw up close and personal is when Sequoia makes an investment, they're all in, they're at every board meeting, they're there early, they've read the materials, and they're going to work really hard. And then the rest of the world and the ecosystem knows that. So right after you raise money from Sequoia, your email starts going off, with every other Series B firm that wants to take the meeting that wants to get to know you maybe do a preemptive financing. What does world class governance look like for a founder in a Series A company in a Series B company? And what is the role of that board? Because it does seem like we had some weird thing happen, where we empowered a bunch of founders. And we can think about a lot of examples,

SPEAKER_06: whether it's we work or others, where the founders had a lot of power, the governance was very weak, and things went off the rails. So what does good governance look like in your experience?

SPEAKER_18: Well, it's not a uniform answer. I can argue both sides. There's the we work side where it didn't work to have founder control. Conversely, Mark Zuckerberg almost lost his company. Because the investors wanted to sell it. So a lot of it is a case by case. I'm in business at NewBank with David Velez. I insisted that he had control of the board. Because at the end of the day, a lot of these boards are made up of people. Yes, there's a couple of venture folks, but then there's a whole people who own three shares. And so who do I trust more, an accomplished founder, or a board that's not invested in? So my answer to you, Jason, as much as you might have expected, I was going to say, good governance is a balanced board, system of checks and balances. I think it's case by case. To me, where it gets really scary is where you have the decent young founder that sees everybody have board control. I want board control.

SPEAKER_19: Or maybe you've got four founders, they all want to be on the board. You know, I've got little tricks. If you've got four founders, I'm in, but I've got the dividing vote. Because if it's two against one, we can fix it. If it's three against two, we got gridlock. So I was on the board of a company with

SPEAKER_18: four founders on the board. I said, I'm good with that. One condition. If two argue against two, then I come in. And so there's these little things you do to make sure the company can survive and

SPEAKER_19: excel and endure these predictable founder issues that may arise when you've got too many chickens in the coop and so on. But there is no one answer.

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David Friedberg: happen. And I think you guys had obviously the closest view of this YouTube had to sell early obviously that a huge lawsuit. And then Instagram decided to sell early arguably those two businesses would be quarter trillion dollar $500 billion businesses. I think we would both agree, but they sold early. That's right. In one case, maybe it was the legal in the other case.

SPEAKER_43: Maybe the founder just, you know, made a mistake. I don't know. How do you look at keeping founders

SPEAKER_00: in the game and keeping them long term greedy as opposed to short term and the impact that

SPEAKER_18: secondaries has had on the industry? The thing I find really offensive is when a series B firm in a series B round prior to maybe even the product of ship offers what I call a bribe. It truly is a bribe. I don't care what name you put on it to a founder that says, hey, sell some shares,

SPEAKER_19: we'll increase the pool, we'll re-up you, forget about the series A. It is really a bribe and it's meant to divide the founders from the series A investors, which creates, I'm going to use a bit of a technical term, a bit of a show at that point, because it's a mess. That's one case where I am incredibly opposed. But if you've got a founders who's done something, who's reached some scale, from my standpoint, why not have the founder take 5% of their ownership? Maybe their founder has a wife and children. Maybe, you know, look, we're in Silicon Valley. Things are expensive to live here. Exactly. Maybe you want to buy a house. And that also prevents the founder from doing something silly and wanting to sell the company simply because $100 million sounds like a whole pile of money. I was in the board of a company where the founders wanted to sell the company for $75 million. The founder had a new baby, a new wife, it was going to make $20 million. And so, we allowed a small secondary, I blocked the sale, founder wasn't very happy until the company was sold for $4 billion. And now he's my best friend. And so, you know, those things happen. Sometimes we get accused of quote, playing the portfolio, but that's not the case. Because first of all, we have the power law, as you know, it's only a couple of companies that generate most of the returns.

SPEAKER_18: Well, what we do have is pattern recognition when it starts working, where we can spot this company's working, Mr. Founder, don't sell it. In which case, boy, 10% secondary is great. Now, at that point, I don't just want to allow the founder to sell, I find it very unfair for the founder to sell. A founder is a founder until he's unemployed, and then he should be treated like everybody else. And then I insist on a vertical slice of the company, I think everybody should be treated fairly.

SPEAKER_19: Also, a founder, he needs to signal to the employees that he's a leader of men and women. How do you become a leader when you have preferential treatment? It's like the general who eats caviar while everybody else is on the front lines. You know, a quote that probably can hit home right now in light of what's going on in the Ukraine. And so I think people should be treated

SPEAKER_18: equally. I think the founders should be no different than a receptionist. In fact, the founder's job is

SPEAKER_55: to make the receptionist rich. If the founder makes the receptionist rich, I guarantee you everybody

David Friedberg: wins. And this is, I think something people have a misconception about in Silicon Valley, they say, Well, why does this person deserve this money? Why did the person who painted the mural at Facebook or the Google chef make all this money? That's why we have the level of enthusiasm for these companies. And the work ethic we have is that everybody gets to partake. And what you're saying here is with the secondary offerings, we've seen situations where the founder says, You know what, okay, there's $20 million to be had, my co founder and I get to get 10 each, we're done. Whereas they maybe there's early employees who could, you know, that $100,000 or $250,000 could pay down some student loans or maybe put a down payment on an apartment or something, it should be fair. And this, I've started to see this now as a seed investor in many companies where the series B comes in and the founder goes, This person's offering to give me 20% more shares and read out me and take $4 million in secondary, everybody's going to get diluted, not the 20% of the round, but it's going to be 37%.

SPEAKER_43: And that's the only deal I could find like, wait a second, but we're talking to 20 VCs. Did any of the other ones get to term sheet level? And it is exactly a bribe. These two things should be separated. When that be a much better practice that the the CEO getting re-upped or the

SPEAKER_59: secondary was done after the investment at a board meeting with proper diligence and a proper process?

SPEAKER_19: Look, we have had a number of firms, and they usually the momentum firms, they're the firms that show up during go go days, and they run away the moment there's hiccups trying that. And we make it very clear, if you pull that off, we will try to shut you out of all investments. It's not because we're greedy, because I think it damages companies, it damages relationships. And we believe in the very long term, we want to, you know, now with the Sequoia Capital Fund that you know about, we can tell a founder, we want to be your business partner, if you execute for 25 years, there's no reason why we can't be. And that relationship is built brick by brick. And while it takes a long time to create, it takes very little to break it. And a violation of trust is the very way that gets broken. Either

SPEAKER_65: way, either way. Yeah. Yeah, I mean, this is a long term game that we're playing here. And that's,

David Friedberg: that's what makes the ecosystem work. It works on trust. And you have to trust that everybody is incented and using that capital structure. Properly, let's talk a little bit about this new structure you're doing where Sequoia LPs will then be part of this new fund, the Sequoia Fund, where you don't have to liquidate some of these great investments, because my understanding is all these great investments Sequoia made over the years, many of them did better after the IPOs than they did even in the private market, which I thought was just mind boggling when you think about it. But company like Google company like Apple, if you hold those shares for a long time, my Lord, there's no reason to ever sell a company like that. And if you knew in the private markets, this was a great company. Well, then you know, in the public markets, don't you?

SPEAKER_18: Robert Leonard Well, look, it's way tougher to go from zero to five billion in market cap than to go from five to 20 billion. We've learned that lesson slowly over the years. I mean, we distributed Cisco system, I think, at less than $500 million market cap. And, you know, what did that thing end up to be worth? We were a lot more careful with Yahoo and Google and ServiceNow and Facebook, but we could be doing a lot, a lot better. So we have a long list of these companies. And so we looked at our public holdings one day, our public and private

SPEAKER_19: holding, and they were almost $80 billion. And instinctively, we said, we have a competitive advantage. How do we punch to our weight, not below our weight? What can we do with this asset in a win-win? What I mean by win-win? Well, win-win-win. Founders first, limited partners, in our case,

SPEAKER_18: 70% are nonprofits, and Sequoia. And we thought, boy, if we could telegraph to founders that we can be with you for a very long time, that's a win for the founders. If we can tell limited partners,

SPEAKER_19: we'll help you manage your distribution so you don't sell the day you get them, hold them for the long-term. And from our standpoint, if we could be on these boards, a handful of boards for a long time, that really helps us as well. So we thought we had a unique asset that not everybody can replicate. Because if we say we generated $7 trillion in market cap, 250 IPOs, it doesn't take much for another partner to say, we kind of did that too. We have 100 IPOs. But for the Sequoia Fund, what you need is a corpus of big exits, and a track record of that. So we think we have a unique

SPEAKER_18: advantage that's beneficial to founders, long-term capital, it's beneficial to limited partners, greater returns, most of them great causes, beneficial to us to gain market power,

SPEAKER_19: so we can serve founders better, we don't have to flinch as much, and so on. So we had this notion that we had an asset, and Rulof really is the one that took the lead, you know, it was CFO of PayPal, and an IQ, God knows how high, to figure out how do we take advantage. But we all had the insight that

SPEAKER_71: there was an advantage, it's Rulof that developed it into a product. Listen, in business and in life,

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David Friedberg: And the product, how did that conversation go with these, you know, the greatest LPs in the world? And it's one of the great things when you're a Sequoia founder and you get to come to a Sequoia dinner and see, wow, we're working really hard. Hey, Sequoia, you know, you know, 10X, 20X, 50X, the Ford Foundation or whatever fund it is that's doing incredible work in the world. How did they take this concept of, hey, let's hold the public companies for a long time and let us help you manage that? Because, hey, we found the companies when it was two people. We kind of know what we're doing here. Did any of them say, I don't want to participate? Did all of them say, sure, we trust you?

SPEAKER_79: So, prior to answer your question, I want to make sure the audience knows how seriously

SPEAKER_19: we take our role. On one side, we have mostly nonprofits, whether it's women's rights or African-American rights or underprivileged kids like me that couldn't have gone to college, or what's going on in the Ukraine. There's a lot of capital for these foundations heading over there. On the other side, we have these founders who can see the future and want to build great companies. A little old Sequoia is in the middle of this. How privileged is that role? We take that extremely seriously. Now, when we asked LPs how much they would convert, they had public holdings. You have a choice, Mr. LP or Ms. LP. You can either get the distribution or let us manage. I'm happy to say that 95 cents out of every eligible dollar decided to let us manage it. Furthermore, we received over $8 billion in extra cash. By the way, it takes some more cash too, the Sequoia capital. And furthermore, there was a lot of capital from us, the general partners, the investors of Sequoia that rolled over, complete alignment with the LPs. And so, they saw us rolling over, they gave us an incredible commitment, and they added cash to us because they completely bought into a strategy that long-term hold is quite beneficial to them. And who else is best equipped to know how long these companies can grow than us who are actually sitting on those boards?

SPEAKER_81: And so, our goal is, can we be NASDAQ by a few percentage points, five percentage points, once the security is public, and we have a long track record of showing that for the ones we deem long-term franchise company, and we can seem to pick them, they can be NASDAQ by quite a large

SPEAKER_19: amount. It doesn't mean every company. It doesn't mean every company, but it does mean a number of

David Friedberg: them that we've been investors with. Um, you have built a reputation of acting at a high level and working incredibly hard, even in the cases where, and it's still the majority of companies, even for Sequoia, the companies don't work out or fail, uh, outright, or they just return 1x or 5x, which doesn't move the needle when you have other things in the portfolio. How do you mentor and train this next generation of investors? I watched firsthand as Alfred and Ruloff joined the firm, and now there's a whole another generation I'm meeting at Sequoia. Uh, how do you train them of

SPEAKER_86: how to behave and how to be supportive, even when you know, hey, this company is not going to be the

SPEAKER_68: one that makes the fund? First, it all starts with the type of people that you pick. And the type of

SPEAKER_19: people that we pick, I, I, I'd like to say they were not the quarterback of the football team in high school. They were the loaners, shunned to the side a bit, too much IQ, a little quirky and so on. They have a chip on their shoulders. They are pissed off. They're always going to be pissed off. But within that, they have to be good souls. And so when we look for people who have taken, who are a little pissed off in life for whatever reason, mom reason, dad reason, brother reason, uh, you know, life reason, no means reasons, uh, who are driven like crazy sometime because of injury,

SPEAKER_81: emotional injury that are good souls. When you peel the onions and we put them in an environment of

SPEAKER_19: trust, both compensation, trust, we're relatively flat decision-making trust, give credit trust, uh, give attractive deal source. Doug Leone didn't do service. Now, Pat Grady is the one who sourced it. Alfred Lin, he joined us right away. He got Airbnb. When most firms will give you the crappy deal, we'll give you the wonderful investment. Uh, the wonderful company. Mike Moritz is on Google. Well, I source Google, but the fact we have this, we approach point one. Point two, a little dirty secrets. Most investors make the calculus. You know, if a company is not working, why do I want to jump in and try to fix and maybe piss off the entrepreneur later? I'm going to get the negative reference. Why don't I just put a big smile on my face? Not all the way until failure, but that, you know, I'm now founder friendly. Well, let me make sure, you know, we don't have a bone in our body that can do that. Okay. I could be on two boards, a company struggling that we're trying to keep alive in the company where we make $2 billion. I may call the $2 billion company first, but right away afterwards, not the day after a minute later, I'll call the other person. Meaning that, uh, for those of you that have children, you have children thinking of different capabilities. There's no way you're going to not help the one who's struggling. And it's just who we are. We just can't help it. You know, we're going to work as hard as we can to help that company. Because at least in my mind, I think there are people that have risked their careers that are husband that have wives and children at home. There are wives who are husband and children at home. How, if you, if you're, have any sense of humanity, how can you not jump in and help that company until the very end? And one thing I tell founders, don't just do references on Sequoia or on me or what work. Of course, those are going to tell you what an incredible board member I am. Go ask the last two companies that haven't worked and asked about behavior. Ask about how generous we were when we did a carve out for employees. Did we nickel and dime you or were we as generous as we possibly could? Those are the real

SPEAKER_89: references that count in the same way that you learn more in failure than you do when things are nice and

David Friedberg: rose. Another, uh, thing that has changed the industry was Sequoia's, um, inside rounds for WhatsApp. You, from what I understand, there were two or three rounds of investing. You saw this was a rocket ship and you said, Hey, if you need more money, we'd be willing to invest in the company. And I think so going to that three or four times talk about crucible moments. And then when the company sold, obviously was the greatest exit, I think up until that point in the history of Silicon Valley, when it sold to Facebook for 20 billion, I believe if my memory is serving me correctly. And you were the only investors essentially in the company. Tell me about making that decision to pioneer that new technique of the inside around. Well, I don't think it was new.

SPEAKER_81: We've done that a whole bunch of other times where if a company is working, we vertically integrate it. We were a venture firm. We did a growth business. We did a seed business. We did a pre IPO called global growth fund. Essentially. We've learned that when a company's working and they need more capital, and we've been working with that company for six, seven years, why shouldn't we continue to invest? Sometimes it's an inside round. Sometimes it's a later stage round along with other people. But the notion is, we have a nice stable of companies like Stripe, see venture growth or new bank, party one seed venture growth, why not continue to invest? And sometimes you're the only investor because you're the devil. They know and I hate to use those terms. Yeah. The other side of the argument, and it's a good argument. A founder may say, Hey, I don't want control in the hands of one firm, or I want a secondary Rolodex. I remember in DoorDash, we wanted to do the series B and the seal rightfully said, I've got your Rolodex. Let me go get a second Rolodex. Each situation is different. What we'd like to do though, is be able to double down and triple down, including the IPO. We have a hedge fund. We actually have a couple of hedge funds to buy shares. We have a number of IPO shares that we bought and never sold a share. I'm talking, we bought five, six years ago. So we truly have the

SPEAKER_19: ability to go from idea to IPO and beyond. And why not ride those incredible winners for a very,

SPEAKER_94: very long time. And to me, that means 20, 25 years.

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David Friedberg: Okay, so now we're looking at a 2025 year arc for Sequoia. And it's interesting you bring up DoorDash, people don't know this, perhaps not fully public information. They were I spoke to the founders, and there was a large late stage, let's call it Johnny come lately firm that was splashing cash around market was hot. They dragged him on for a year, couldn't get the deal closed. And the company DoorDash was facing the risk of ruin, you guys came in and saved the day with a pretty large round and a

SPEAKER_08: pretty risky bet. Maybe you could tell me a little bit about those crucible moments for you when company is, you know, gets left at the altar by another one of those large late stage firms, and you had to come in and basically save the company. Well, look, the very best thing about

SPEAKER_27: those situations, those founders tend to be razor sharp, there's nothing like being at the precipice of death, to make you sharp. We have other cases where the founders have had extremely easy the whole run, and those tend to be more sloppily run company, I won't mention name, but we have those.

SPEAKER_19: Sure. So the great lesson for DoorDash for me, or the great benefit, yes, it was left at the altar, and it wasn't quite as easy, we came in and saved the day, because I don't want to take all the credit. We went out and got another firm with deep pockets, and two of us saved the day. I insisted on that, I remember saying, we can't be the only one, we may not have enough cash to save the day by ourselves. But we organized the round, two of us held hands and saved the day. But we wanted to save the day, it was a great business with a great founder. And boy, to me, the greatest takeaway of DoorDash is that founder learned any lesson he wanted to learn. And to this day, DoorDash is one of the best run company in Silicon Valley, it's a tough business, with Tony running a terrific operation. And one of the reasons is, he went through very tough times.

David Friedberg: Yeah, it's people sometimes think it's like, you know, these incredible founders make these incredible companies, sometimes these incredible companies and the journey and those near death experiences that actually make the founders.

SPEAKER_14: That's exactly right.

David Friedberg: Yeah. Yeah. So let's talk about that. Greatest founders you've worked with the founders who you watched up close and personal evolve. And really be what people thought, I think in the early days of Silicon Valley wasn't possible, we thought, Hey, Larry and Sergey could do this. But if you're going to go public, you need Eric Schmidt. And then, hey, maybe Larry comes back and Sergey comes back. So who are the founders you've seen do both stages that ideation building the original team getting to 10

SPEAKER_43: people getting the product to market and then getting to 10 billion in revenue 100 billion in revenue? Who are those founders who cross that chasm?

SPEAKER_19: So two founders for different reasons. The first is David Velez of new bank. One employee was an associate at Sequoia. And I'll give you two great examples of his early greatness. His CTO was an associate of Francisco partners. Now you wonder, what's an associate from Francisco partners doing doing a CTO. The first person in business was a lady, God bless her soul. They got devastating checks at banks in Brazil. And David was smart enough to know the IQ of the person from Francisco was over the top. And the lady from the bank was getting devastating checks because she was a doer. He gave me the insight of his ability to make calls. And suddenly, that company exploded and he honestly hasn't made a wrong move. So he transformed himself for founder to leader. And leader means having vision and execution, both, as well as culture. And you know, the company's running, they just announced a quarter last week, a wonderful quarter. It's I've never seen new product ideation in a business as rapid as his. It is, you know, for the very long term, I'm very

SPEAKER_18: optimistic. I'm not commenting about the very next quarter or anything of the sort. Sure, of course.

SPEAKER_19: The other person for a very different reason was Fred Luddy of ServiceNow. And there is a man who started a great business, incredible product market fit, and had the courage to look in the mirror and say, I don't want to run the company. I just like to code. And then it became an issue of building the trust so he and I can find them as business partners. And to me, there's a lesson there, because it all sounds great. You're

SPEAKER_81: young, I want to be the leader, I want to be the founder. But sometimes you think you want to be the

SPEAKER_19: founder for ego for all the human traits. And you realize that administrative work doing reviews, and it's not what you want to do. And Fred, he wasn't a young man, Fred might have been 45, had the courage. Now we took him to Silicon Valley for a day to meet a whole bunch of executives VP. At the end of the day, he said, Doug, like, we don't have a VP like that in our company. I'm not like any of the CEOs. Can you please help me find the chief executive offices? I want to run product. And he it was a bit of a chance he took because he put his trust in me, he had known me for six months

SPEAKER_81: or in Sequoia. And we found Frank Slootman and the rest is history. Wow. Two very different cases that bring up two different examples. It's look, it's the idea of knowing. And no, you don't know.

SPEAKER_19: Those are the great things you can live with what you cannot live with is not knowing what you don't know. That is what trouble arises. It's that in between case that causes trouble.

SPEAKER_06: Yeah. Slootman is quite an executive. Maybe you could speak a little bit on that guy's ability

SPEAKER_22: to execute. I just read his book and had him on the podcast. I mean, he's serious about running a

SPEAKER_109: business at a high level. He's three for three. And I'm not talking three for three when the

SPEAKER_19: companies were made made. He's three for three. We had to go in. In a case of the first company, it was extremely young. In a case of service now, we had incredibly upset customers. You know, the company was selling things, but too much, the services. In a case of Snowflake, he also had to make some moves. You know, he is the king of no bullshit, extreme focus. We all hold hands. We all agree on what the plan is and we go execute. And to me, the greatest lesson is what is the one thing you can focus on? He talks about that. We all want to focus on four things. Everything matters. Frank there has asked the question, what is the one thing? In fact, I was at a board meeting last week at a company. They said, we want to do the six, seven things, all great or ambitious. I finally said, thinking of Frank Slootman, but if you have to get one thing right, what is it? Because I wasn't clear after those seven. And this CEO was able to articulate it, which gave me great confidence that he had clarity. And so in my mind, I've never met an

SPEAKER_27: executive more capable than Frank Slootman. It's pretty incredible what he's done. You're

SPEAKER_08: absolutely right. Okay, Silicon Valley. We've moved to and Don Valentine, I remember saying this, we won't invest in anything we can't bite to rest in peace, Don, a juggernaut. And we should talk

David Friedberg: about him a little bit. And the founding of the firm. Let's talk first about Silicon Valley is a hub of excellence. Everybody was coming here, California was the dream, San Francisco's turned into a bit of a nightmare. California is obviously mismanaged. And then we have the pandemic and everybody goes,

SPEAKER_06: you know, in four different directions, and companies are all working remote, seems to be

David Friedberg: working. But something seems to have been lost. What's your sort of handicapping of what's happened

SPEAKER_06: in terms of all these other centers of excellence, whether it's Austin, Los Angeles, New York,

David Friedberg: Florida, Miami, as well as this work from home trend are great companies going to be made with

SPEAKER_06: everybody working at home? Or do people need to be in the headquarters and be at the locus of power

SPEAKER_18: and be grinding it out? What are your thoughts? Lots of questions there. First of all, on Silicon Valley, I think the politicians are doing the best job they can to make sure Silicon Valley does not

SPEAKER_19: exist. And I think the damage done to Silicon Valley is irreparable. Now, that's only part of it. Silicon Valley still have the most companies and so on. But it's nothing like it was five years ago, seven years ago, and it's only going to get worse. But it's not just the fault of politicians. The other thing is, we're all interconnected. And we're not doing deep technology, you no longer have to be a Stanford PhD candidate. There are many great universities across America, we all communicate entrepreneurism, spread throughout the globe, not just America, but it's Beijing, Shanghai, Latin America, Europe, and so on. So it's also a bit of that trend. So there are two issues there. So I think it would be who's most partnerships want to invest to make sure that they don't just have to ride a bicycle to it to quote down Valentine. Of course, we've made that change. But it was easier for us to initially go to Israel, because that looked like Silicon Valley, and then China and then India, because that looked more in value than go to LA originally, and Austin. Now, a few years later, we've gone to Europe, there's a lot of activity, more market leaders, it's not this opportunity, it's market leaders is what we're interested in. Because the market leaders has about 70% of the market value. And we're seeing more market leaders throughout the whole globe. So I think that trend is

SPEAKER_120: here to continue. So that's the issue in Silicon Valley. What was your second question? You asked me so many questions.

David Friedberg: And people working remotely, people have seemed to gotten used to this, the concept of coming to Silicon Valley and going up and down Santa road, doing your eight, nine, 10 meetings, getting two term sheets. It's now moved to zooms, 20 minute zooms, maybe people send you a loom, it's more efficient, people get to meet more companies get to meet more founders, and then the relationships start, I guess, after the investment. Yeah, something seems to change there too.

SPEAKER_19: So one, there's a shortage of knowledge workers. So knowledge workers are the one with the power and knowledge workers have not figured out that if it's for family reasons, in many cases, programmers don't need as much of a social outlet, are perfectly comfortable working in remote locations. In those cases, the companies that have programs to unite people once a quarter, once every six months. But then after that, it's a little bit of game theory. In other words, if Google offers this, if you want to compete with Google, you have to offer this, I don't think you can, you know, trailblaze a new way. I'm a little company in New York City, I'm competing against Google, by the way, show up at work five days a week, you're just not going to get to people. So I think recognizing the knowledge workers can call their own shots, you're going to have that I actually happen to believe that in salespeople, the closer you move to the outbound part of the company with salespeople being the most outbound, they tend to be more social, they get energy from one another. I think that's where you want a little more congregation. And so I think we're going to stay hybrid. And we have to see where the knowledge workers for the larger companies are going to do first. The trailblazers are going to be Google, they're going to be Apple, they're going to be Facebook, because we compete with those in our little world. And we can't call those shots, we have to essentially follow their leads for the knowledge workers. For the salespeople, I think there's a little more leeway. I think it's sacrilegious to have four salespeople, tell the salespeople, for example, and I know we are leading with, we now have the product-led growth and all those good things. But if you've got 10 salespeople, I'd rather have them in one room, I like to see them now, let them learn to one another, let them get the energy, go out for a beer

David Friedberg: afterwards, and so on. Yeah. And if you look at Facebook and Apple and Google, what do you think the chances they're going to get people to come back to those campuses? Or do you think it's going

SPEAKER_131: to be like a two or three day a week thing? I think it's going to be a two to three day a week.

SPEAKER_27: Yeah. You know, it's shocking to say that. Parents and mothers have gotten used to raising

SPEAKER_19: their children. And isn't that a beautiful thing? The commute of two hours is too painful. And even though I'm hearing there's more productivity, I don't believe there's more productivity. I try to

SPEAKER_39: reach people at home a lot and they don't answer their darn cell phone at 3pm. But you've got this

SPEAKER_81: two hours of commute time that you no longer have. And so that's time they can spend either working

SPEAKER_19: year and off hours and doing something with their family. I think it's a good thing for the American society. It's not a great thing for companies who hit a bump, because you hit a bump and you need leadership and you need some cohesive some rah rah rah moment. It's tough to have a rah rah moment with with 50 employees in 50 cities. It does feel like there. Yeah, that is something I've seen is people,

David Friedberg: especially young people now with this work from home trend, they've never been mentored, they've never been in an office, they're incredibly hard to establish any kind of culture remotely over zoom. And then they get another offer. And it's just like switching a tab in their Chrome browser, they log out of one slack instance, they're in a new slack instance. And now they're working that afternoon in a new company, the loyalty and esprit de corps is gone.

SPEAKER_18: It's tougher for young people, because at the end of the day, if you and I work in the same office,

SPEAKER_19: you may give a presentation, I may have our opinion of you. I also build my opinion from the 20 water cooler conversations I have, are you a good guy? How are you thinking about other things? That is what essentially is gone. Now I get the snippet from this work interaction we get and all these other data points are what I think you are as a human being that may make you a great leader. I may be missing those subtleties. So I actually feel bad for younger people, they are the ones that are

SPEAKER_145: suffering the most from this, in my opinion. Yeah. What do you think about these venture capital firms?

David Friedberg: I won't name any specifically, but venture capital firms that now are saying, Hey, we're going to build up a bunch of services. I remember Sequoia had one partner who would help with placing a great talent, high level talent. But now I'm seeing venture firms doing the marketing for their startups and the HR and you know, and all these different features. Do you think that that is a great model? Or do you think maybe it's a little overblown? Because it seems to me the great founders I've invested in, they don't want you coming here and doing their marketing or, you know, doing their HR, maybe if you got a good reference or two for a senior executive, of course, but what are your thoughts

SPEAKER_06: on this like higher level of service from firms? That is being so I see no models. And I'll tell you

SPEAKER_18: how we do things. We believe you want to teach a person to fish. Meaning if you are a founder,

SPEAKER_27: we will help you recruit the first four or five world class engineers, because that better be A plus. But recruiting, for example, is a core competency. And if we recruit the first 30, you're never going to learn the core competency. And so I think in a world where things are moving

SPEAKER_19: faster and faster, because we're interconnected, we're moving faster and faster, you have to run, you know, like once upon a time, you'd go into Europe once you conquer the US. Now you can't do that. You have to run faster, maybe you have to build two modules at once. And so providing these companies with a running start, a fast running start is a good thing. So I am for services. But what I'm not for is overwhelming services that are a pain in the rear end. I've had more than one CEO say, these guys won't leave me alone. You know, they made me for introduction. I know 40 and I never got a customer. You know, that's, that's wrong. And the other thing, doing if you will, too much, where the car competency where the DNA is not built by the founder or the management team. So I think services of a role, but I would limit it to a point, it's got to help you get a running start. And then and then you've got to do look, I don't want to continue to do my kids homework in college. You know, I may help them in second grade and not to think about a problem with third grade. And I'm not saying that a founder is a third grader. We're not better than founders. I'm just making the analogy that there are sort of some core confidence. First time founders have never,

SPEAKER_152: a first time founder may have never dealt with any. Exactly. They may have,

SPEAKER_19: they don't even, they've never even done recruiting. And we'll, and we'll have five conversations. We'll help you recruit with help you set up systems, but then it's on you. Let's go

David Friedberg: recruit a VP of HR. Okay, a lot of companies raising a lot of money at very high valuations, we talked about, you know, some of the pitfalls there. But here we are in a retreating market, the multiples have collapsed. We have some companies in our portfolio, I'm sure you have some of them as well that took advantage of these frothy valuations and put 100 million in the tank, 250 million in the tank. And now all of a sudden compression, the valuation just not going to be there. It's not going to be 75 times next year's revenue top line. It's going to be 20 times or something. What's the best advice for those companies that built a war chest? And maybe

SPEAKER_43: they're two or three years out now from the valuation they closed last year.

SPEAKER_157: Yeah. And so we chuckled because all the hedge fund investors, they used to go,

SPEAKER_126: go, go, go, go overnight, the switches flip, stop, stop, stop, stop, stop. Neither was right. Essentially, it's a case by case situation. First of all,

SPEAKER_19: you look at the of the operating model where this company is against all its competitors. I'm on some boards that I tell them time to play defense. I'm on a couple of boards that say, attack like crazy because your competitors are weak. Recognizing that most likely the next valuation may not be at a high price, but we have enough money in the bank to go do that. I think most companies have enough cash that they don't have to face the conundrum of raising money in a down market. The best companies have been overfunded. They have the luxury of waiting a couple of years, and they should wait. Maybe the market will change and so on. But the thing that's not appropriate for me is the yo-yo, go, go, go, stop, stop, stop, because that's just mechanical. It's got to be a company-by-company analysis of its relevant strength against the competition. That was a lesson we learned in 08 when everybody, we actually told most companies to hold back, and we learned the lesson. Maybe if you're strong, don't hold back. Continue to invest in R&D. Continue to invest in sales and obliterate your competitors who are way more vulnerable, who cannot raise money like you possibly can.

SPEAKER_161: And so to me, it's case-by-case, and a steady hand.

David Friedberg: Right. And when you have new entrants in the market, these hedge funds who dip down, they're not even taking board seats. A lot of them are just dumping the money in and yeah, let us know when you're going to IPO. It's a very strange phenomenon that seems to have retreated already. Okay, let's take some things outside of maybe what we do on a day-to-day basis in investing. And let's look at some of the ecosystem we operate in. We have a new antitrust czar in Washington, Lina Khan, and I was just watching an interview with her. And we've now shifted the lens where she wants to shift the lens from not consumer harm, which has been a pretty good lens up until now. If consumers are doing good, the company's probably doing the right thing for everybody and that's good for society to future competition and maybe rolling back, maybe Instagram or WhatsApp shouldn't have been bought. What do you think of this lens of I'm going to deny acquisitions that could Incumber competition in the future? This seems like an impossible test to administer my answer.

SPEAKER_18: And I chuckle when you ask the questions, what do I trust more? Leave it all alone. I mean, clearly, if there was a well thought out plan to limit misbehavior, I would love to see that. But I trust the

SPEAKER_19: government less to come up with that than just leave it the heck alone and let technology do its thing. I'm always mindful that if Zuckerberg didn't buy Instagram, Facebook would probably be gone.

SPEAKER_18: So I trust technology to do its thing more than I trust regulators to get it right. I hate to sound

SPEAKER_19: so harsh, but I actually have that as an opinion. Yes, you do have large companies. I won't say any examples. I don't want to embarrass anybody that are misbehaving. You know, it happens in the open source, you know, trying to copy the open source solution. And in some companies, not give access to the underlying platform, except for their product first, we've seen all that. But unfortunately, regulators, there's always the may look, they mean well, sometimes, and even when they mean, well, there's laws of unintended consequences that seem to do more damage than not. And so my view would be less is more, let technology do its things, and only go after the extreme cases, because you're have a greater chance of being right picking on those that coming with holistic solutions that retrospectively may have done something that you thought they may have done when in fact, they wouldn't do that.

David Friedberg: Let's talk about China. You guys were very early amongst the earliest to set up shop there. Yes, but things changed radically over the last couple of years. Is it still a great place to invest? And what's your thesis on, you know, engagement in China and investing?

SPEAKER_27: First, people should know that one, we have a group of partners in China, they make local decisions. And I also want people to know that for the last I want to say 13 years, there's never been a dime extra that anybody in US made from China, meaning that we contribute to a pool, they contribute to a

SPEAKER_19: pool, and we all take the money out. So we all have different kinds of nuts, and we get a bag of mixed nuts, but it's the same dollar value. So it is not any greed that says we're in China. The reason we went to China, we saw global entrepreneurs, even here, and if we have Chinese founders here, and we're competing with NEA, I'm just picking an NEA now, and they have a China operations that we know, where's the Chinese founders likely to do business? With us, and so on. So that's why we went to China, some defense, some offense. Now, clearly, the world is flat. No, it's not flat. We're going to build the parallel technology stacks. And I hope we limit that to the R phase, not the D phase. If I've got a sales product that can figure out what the forecast is based on email traffic, that is not a national secret. Let me be very clear of that. And we also don't invest in China in companies that specific are aimed at the military. It's no one's interest to do that in any geo. So I just want to lay those

SPEAKER_81: ground rules. But the reality now is that the two countries are in a technological warfare, whether it's AI, whether it's robotics. But that's the R phase, not the D phase. We've gotten ready for every

SPEAKER_19: eventuality to be perfectly frank. You know, are we going to be together? We've all stated affirmatively, we want to stay together, who knows what the government is going to do. We know every financial

SPEAKER_81: services firm of size is operating in China, we're operating China, of course, we're the technology

SPEAKER_19: leaders. So there there's a little bit of a spotlight on us. But we've done I think everything right for America. We've done a look, and I'm an immigrant from Italy, I was given an opportunity in this country. I love America more than most people, you know, and I would do anything to to protect, you know, just to protect our country. We we have done everything right. We have gotten ready for every eventuality. Now what is going on in China? President Xi, from his perspective, is saying I need stability. I've got a billion something people, I can't have 40 million people only going to education, only 5 million people have access to Tsinghua, I've got to have 50 million people. So everything he's doing is promoting equity, if you will. One, two, he doesn't want any company to be overly powerful. So he's told the tech companies stay in your own lane, don't go into 50 businesses. And by the way, don't become too profitable, no 70% pre tax operating margin, which means consumer paying.

SPEAKER_81: So that side has some clouds on it. Move over to EV, move over to robotics, those are wide open, move over in and in financial services, those are wide open. So a lot of it is being on the right side

SPEAKER_19: of what the Chinese government is trying to do. Personally, I think it's a fabulous time to invest in China. Why do I say that? Because I inherently want to invest in places where everybody's running away. You know, I don't want to invest when everybody's running in. But you've got to be with a group that understands these trends, and invest in the marketplaces that you completely understand are in the right side of what the Chinese government is trying to do.

David Friedberg: Yeah, and engagement as a strategy is completely logical in terms of two countries trying to build deeper relationships. And we only have control over our side, what the other side decides to do, you know, is up to them, let's talk about Europe hasn't been traditionally, most countries super favorable to entrepreneurship. You know, we have employment at will here, people try different companies out over there, you know, you want to lay some people off, you have to pay a couple years severance, maybe you have to go to court to let them go. But we do see in the Nordic countries, amazingly, Sweden, Norway, Denmark, just incredible companies, and the unicorns per capita seem to be disproportionate everywhere over over there. What are your thoughts on the European entrepreneurial marketplace?

SPEAKER_161: So we looked at Europe, first of all, as an immigrant, I would have loved nothing more than

SPEAKER_19: the Portofino office. You know, I joke at Sequoia, if you've got it in Italy, I've never grabbed that deal in my whole life. A company, if you've got a company in Italy, it's mine. Let's go.

SPEAKER_91: I made it very clear to everybody at Sequoia. One, two, I looked at Europe twice. And I saw what

SPEAKER_19: you saw until we noticed in the last five years, these market leaders called Klarna and Unity and UI path coming out of Europe, we took note of that and not argue we went to Europe maybe a couple of years too late. We've actually as part of our program. While we're not so active in Washington, we decided to be quite active in Europe to educate these governments. I don't want to do any name dropping. But we've had fairly high level conversations, including some more coming on what it takes to deploy tech in Europe, whether it's friendly tax laws, don't get taxed at distribution, at sale, employment laws. And I think Europe wants to learn because they want to kind of emulate what's happened in the US. So not all countries are going to move overnight, but they certainly have

SPEAKER_81: indicated a willing to be more startup friendly because a lot of countries are realizing in many ways that startups are the lifeblood of the economy. It's where the growth comes from. So in the major countries where you'd expect startup activities, we have we have ongoing conversations with senior

SPEAKER_19: government officials, I'm talking to the prime minister level about some of these issues.

David Friedberg: Is the number one thing how they look at employment and the sort of flexibility a startup needs to bob and weave and make changes versus, you know, they're very protectionist, union based, you know, process for changing people's roles and companies, it seems to me a lot of the entrepreneurs I've met, you know, from various countries, they'll move to another region because they need that flexibility, they need to pop up eight people in this office, oh, that didn't work. Okay, we're going to lay those people off, we'll give them severance, they're going to be fine. They're tech workers, they'll be fine. Like there'd be 20 jobs for them. And it was just too much red tape.

SPEAKER_55: And it's hard enough to build a startup issue. It's how we've done things for 20 years at a different time when workers weren't being treated nicely, security for the workers go all the way

SPEAKER_19: and look at Japan. That's the ultimate of this, right? You don't see a lot of tech in Japan, because some of these reasons a lot of software tech, but you'd see is hardware tech, but it's

SPEAKER_27: changing, it's changing real time, it's going to take another four or five years.

David Friedberg: Let's talk about participation in the startup market equity crowdfunding, allowing civilians, you know, non accredited investors to invest in startups. We have syndicates, I run one, one of the larger ones, you have AngelList, and a lot more access, micro funds happening, many people starting these three 10 $15 million funds, all this activity at the early stage. This is a net benefit to the static ecosystem. Do you have concerns there? What are your thoughts on just the proliferation of interest in this? And maybe should the United States change accreditation laws to allow more people to participate in startups? Yeah, I mean, I think it's pretty unfair

SPEAKER_18: that you can go to Las Vegas and lose $1 million. But God forbid, you can invest 50k in a startups. I

SPEAKER_19: think it's lobbyists got that going. So yes, is the answer point one. Second, I am for anybody investing in startups. But I think a founder should say, here's how much equity X that I want to sell over the life of the company. Figure out what a fair split the founder decides. For the first folks who take the enormous amount of risk, but you know, after a year or so, they're going to be gone. And somebody is going to carry the load, they've taken a little less risk for the next seven, eight years. Founders ought to think about that ratio. And say how much should those people that have taken that enormous risk, but they've had a short tenure with the people that maybe took a hair less risk, but they're now for eight years. And it's where that ratio is out of whack, that you've

David Friedberg: got a real problem, in my opinion. Yeah. People need to be thoughtful when they take, you know, small amounts of money for large amounts of equity, because if it does work,

SPEAKER_144: that equity is going to be worth much more and you just need to be judicious as we wrap here for

SPEAKER_19: a 10th of a percent to a wonderful engineering candidate, when you sold 28% for $500,000. I find

SPEAKER_06: that always shocking. Yeah. Luckily, you know, the thing I've seen now is when we get on cap tables,

David Friedberg: and we see them broken like this, we'll say, hey, listen, the cap table is a little broken here. Do you want to offer the first investors the ability to sell into this round? Or to recap the company or maybe top off, you know, the employee stock option pool? And we're amazed at how reasonable sometimes that that can go down. So it does feel like there's a little cleanup going on

SPEAKER_34: when some of these things get broken, because how can you invest in a company, the founders only own

SPEAKER_27: 20%. I mean, yeah, it's broken forever. I think you have to fix it from day one. And oftentimes, if the first investor is smart and shrewd and says, boy, I can get Sequoia, or some other great firm.

SPEAKER_81: But we have to fix this a little, maybe I got to give up something to make what I have a lot more worth or to increase the probability. We see that happening often. And I think it's our smart call.

SPEAKER_79: It's a smart decision by the original investor. And we've seen that a number of times.

SPEAKER_08: Yeah. All right, let's end where the journey began. I was able lucky enough to meet Don Valentine a number of times one of the warmest, generous individuals you meet in the industry. Obviously, he started the firm and he didn't name it after himself, right? He named it Sequoia. He wanted it

David Friedberg: to be a legacy. You're part of that legacy. And now Rulof and Alfred and in this next generation, maybe you talk a little bit about Don, what made him so special.

SPEAKER_19: So, first of all, I adored Don Valentine. But warmest would not be in the top five adjectives that I would describe him. Don was shrewd, tough, diabolical. And when he was angry,

SPEAKER_27: he just sounded like this. The voice came down. And he would scare the living crap out of you. He was very focused on the first order issues. He was very focused on markets. Remember, it was a different time. And so on. And to me, the greatest asset, the greatest trait, is that one day he had a sense of history about him. He saw what happened at other venture firms, where the founding fathers stood around too long, continued to take equity, drove the firm into the ground. And you have the examples. I don't have to name them. And he decided he did not want to do that. And he turned the partnership to a whole bunch of young investors. He just told us what he

SPEAKER_81: didn't want to do. And we included him in a carry, even though he was not full-time involved in what turned out to be the Google fund. And it was a great example of someone doing the right thing on one side, someone on the other side doing the right thing, and everything working out incredibly well. And as he got older, I also remember, he never spoke up unless asked. He never offered opinions unless asked,

SPEAKER_27: and he was a great example of what a former leader should be. In other words, I'm about to be a former leader in the next few months or years. And that's the playbook I want. I don't want to be the person that people run to where they don't like the answer for the current leader. And he was very

SPEAKER_19: careful not to be that. So it was an evolution of a man from a tough semiconductor, 1970, you know, two by four mindset, to something more more akin to what the 90s are required. A much more generous

SPEAKER_81: man later on, a softer man, but it was a metamorphosis. And that to me was the most impressive thing about Don Valentine. But warm, here's a little story that's in a book. Once I attended a presentation

SPEAKER_19: as an associate with Don. We left the presentation, Don left the note with green ink. He only wrote in green ink. He left that on the table for me to see. Doug, Dash, not fit to listen to founders, left that on the table for me to see. That was my feedback in the way I was questioning founders. Wow, you learn real fast. You know, you have safe spaces. I want feedback every Monday afternoon. Let me know if I'm doing okay. Let me tell you that memo memo that know from Don was worth 20 of those meetings that we now have. And so I love the man he gave me the shot of a lifetime. I respect him

SPEAKER_204: greatly. And boy, he changed my life. He gave me a shot. Okay, we'll end on Michael Moritz. And rule off.

SPEAKER_08: Michael just a juggernaut as well in the industry. Maybe you could tell us about his legacy and what it's like to work with him. And then finally, let's end on rule off. Well, on Michael, keep in mind,

SPEAKER_27: he is a Brit. He is self contained. He is strategic as heck things four steps ahead. You can't have a

SPEAKER_81: conversation with them without him asking all the questions and you providing all the answers. Three

SPEAKER_27: word questions. You're talking for 20 minutes. Not easygoing at all. But he and I made it work for 20 years. We were two diametrically opposed individuals. The funny thing is, he bought a

SPEAKER_19: house in Italy and I love to go to London. And go figure. He's taking Italian lessons and I see him at Sequoia every once in a while. And I'm learning to speak English. I used to have a dictionary, a little black one in my desk because Mike would actually use words in a partner's meeting. I had to go look it up. And that's a true story. I'm not making it up. We made it work. I can tell you it was not easy for him, who probably thought I constrained them. And it wasn't easy for me who I thought maybe had

SPEAKER_81: too many extremes on both sides. But the important thing we made it work mutual respect. And here we are at the right page in the 60s. And we're still in the same partnership. And to me and for him, I bet

SPEAKER_19: it's a great sense of pride. And I think once we both step away from Sequoia, it's gonna be fun to have a few drinks and talk about how I drove him crazy. He drove me crazy and a hug. You know, it's

SPEAKER_210: that kind of relationship, creative tension. Yeah, it's great for the business.

SPEAKER_81: Rulof has really grown and mature as a leader. Rulof, younger man, driven, a little more emotion that he has now, but hard incredibly in the right place. He wants to do the right thing for everybody.

SPEAKER_19: And I would say that Rulof is as good a leader as we've had at Sequoia, certainly better than I've been. I can tell you, I look at Rulof, and I don't hold the candle to that man. By the way, I think the same thing about Mike Moritz. And the beauty is that we all stand on each other's shoulders. So part of it is predictable. Rulof should be better than I, because he was standing on my shoulders. But I could not be more pleased with what Rulof has done in the US. And I would forecast that Sequoia's best year are ahead of us due to not only Rulof, but the team we've assembled that has many other names, many other names.

David Friedberg: Such a great, amazing career you've had. And it's so engaging to be an investor, to work with all these people. When you do hang it up, when you do get off the court, are you prepared for that change of pace to not be in the room with the action? Do you think you can

SPEAKER_43: handle it? Do you think you can handle being out of the game and not in it?

SPEAKER_27: The answer is absolutely yes. Well, one, I'd say one never knows. That's the honest answer.

SPEAKER_19: But I've been at it for 35 years. If truth be known, I force one more fun cycle on myself without losing an inch. The thing I don't want to be is the guy who stuck around the fun too long, which means I'm bringing it every day. But bringing it every day means that you reach a point that it's gotten physically painful. I told Rulof just yesterday, I'm so relieved. I don't have to be the person to come up with all these other great ideas. And I'm also sad because he has another great ideas on how to dominate. And he and I were talking about the strategic move four years from now. So there is a bit of a dichotomy in my brain, but I'll be ready. I'm going to be on eight or nine boards. I bought a whole bunch of musical instruments. I picked up golf during COVID. I stink at it. I've got four children in the Bay Area seven grandchildren. I think that's enough. I think it's a starting point.

SPEAKER_06: On that, I just want to end with a thank you. I was a rough around the edges entrepreneur,

David Friedberg: you guys took me in. I introduced a ton of companies to the firm, you said, Hey, here's a checkbook, why don't you go make some bets changed my life, obviously with the uber investment and many others. I said, I'm going to raise a fund. You said, here's the top 10 funds in the world. I hope I'm not speaking out of turn here. But you mentored me. And then most of all, you wouldn't remember it. But there was a side conversation at Sequoia. Every time I came there, I felt like I was coming to the cathedral where I would learn a lot. And you stopped me at some point. You asked me my plan. I said, You know, I hope and you stop right there. I said, Jason, let me stop right there. Hope isn't a plan. Let's make a plan. And let's talk about the plan. And anybody who's ever worked with me, any founders ever worked with me has heard me say, hope is not a plan. Let's make a plan. And on that note, I just want to thank you,

SPEAKER_06: Doug, for all the mentorship and support you and the firm have given me in my career. It's just been an honor and a pleasure to know you. Thank you for having me. And to spend this hour with you.

SPEAKER_218: Thank you for having me. It's a true honor. Thank you.

SPEAKER_24: Thanks, Doug. All right. We'll see you all next time. Bye bye.

SPEAKER_221: Hey, everyone. Producer Nick here. I want to tell you about the SaaS syndicate. If you're a founder of a SaaS company with a product and market, our investment team wants to talk to you. Head over to thesyndicate.com slash SaaS, S-A-A-S, to apply to raise from the SaaS syndicate. And you can join Jason's syndicate of over 9,000 accredited investors at thesyndicate.com. Producer Justin here.

SPEAKER_222: Know a cool startup? Check out openscouting.com, where anyone can refer a startup to our investment team here at launch. Even if you don't know the founder, if you're the first to flag a company for us and we decide to invest, you'll get 5K in cash or 10% of our carry. Hey, everybody. Producer

SPEAKER_04: Rachel here. Are you an early stage startup that has product and market, some traction, and are looking to raise at least $500,000? Apply today to remote demo day for your chance to pitch to over 9,000 investors in Jason's syndicate. Submit your application at remotedemoday.com. Our next event

SPEAKER_221: is on April 27th. And if you want to learn how to invest in startups from the world's greatest angel investor, and no, we're not talking about Chris Saka, then head to angel.university to apply. The four-hour workshop costs $300 and all proceeds are donated to charity. To date, we've donated over $175,000 to various charities and you can see the full list at angel.university slash charity.