Why Sequoia Capital is One of the Top VC Firms in the World? by Ahmad Takatkah

TL;DR - A list of things that Sequoia Capital and its VCs do that have helped them become one of the top VC firms in the world

Helpfulness - 5

Tags - venture capital, VC, Sequoia Capital, top VC firm, Don Valentine, startup investing

Questions answered:

  • What are some things that Sequoia Capital and its VCs do that make it one of the top VC firms in the world?

Summary:

  • Sequoia focuses more on the size and dynamics of the market and the founders’ idea about the market, rather than the founders’ profile (school, previous experience, etc)
  • When financing startups, Sequoia looks for two main functional skills in the founders: technology/engineering to build the product, and marketing to identify the dynamics of the market.
  • Sequoia supports its founders by providing them with its resources to encourage them to focus on their core business.
    • Example: it funds a lot of small startups in-house at its offices (free rent, meals, etc) and even offers shared resources such as CFOs who work for multiple portfolio companies.
  • Sequoia has teams of people specialising in different areas of developing a knowledge base and market sizing inform about where they should focus; they analyse markets, learn what’s needed, and find appropriate startups rather than waiting for startups to come to them.
  • Since most founders are not good at story-telling, Sequoia encourages its VCs to learn how to ask the questions that make the founder comfortably tell them his/her story.
    • Provides the founder with a way to explain his/her idea and what he/she needs
    • When a portfolio company fails, Sequoia tries to identify what questions its VCs did not ask or what answers they did not understand.
  • Sequoia shuts down a company if the return expectations that they began with seem no longer realistic.

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