I recently read an article in Fortune Magazine about Sequoia Capital, one of the worlds top 3 great venture firms (in my opinion at least). The story was mostly on Sequoia's bumpy entry in asset management but the author also profiled their core venture business, calling it' successes "a mixed bag."
I disagree, I think Sequoia has been stellar in recent years and I anticipate their investors are very happy. So I wrote a letter to the editor which I have copied below:
To the Editor-In the Nov 9th issue, you published a great story by Adam Lashinsky about Sequoia Capital (published online 10-23-09). In addition to profiling Sequoia's struggling new business, Mr Lashinsky also commented on their core business, calling it's performance a mixed bag. Not only do I disagree with this assessment, a lot has happened in the weeks since the story was first published.In venture capital, it frequently only takes 1 strong exit for fund to be a success. Your article mentions successful exits from Sequoia companies such as Zappos, Pure Digital and A123 Systems. I am not familiar with exactly which funds the investments in these companies came from, but even if they came from three different Sequoia funds, I'd say these are enough to consider Sequoia a huge success. They alone account for over $3BB in exits. (Another exit you didn't mention is the IPO of Peak Sport in Hong Kong, that's another few billion)Since the story was published, two more exits are in the works as of the time I write to you. Google has announced an agreement to acquire AdMob for $750 million and just today MySpace is said to have purchased the assets of iMeem...both are Sequoia investments mentioned in your article.The article also mentions companies such as LinkedIn (with its $1BB valuation) that have yet to exit. Another company worth mentioning is Portland, Ore based Jive Software. Sequoia is the only investor in this profitable and fast growing company. The cconsensus in the industry is that Jive is only a year or two away from a strong exit. LinkedIn and Jive are almost sure bets to produce another few billion.So even though Sequoia's asset management group has struggled, their core business performance is far from a mixed bag.Jeff the Great