This Week in Startups - Doug Leone of Sequoia Capital: global growth, partnering with legendary companies and the evergreen fund | E1403

Episode Date: March 9, 2022

"Sequoia Capital is the greatest venture capital firm of all time. It's indisputable." - Jason  Jason chats with Sequoia's Doug Leone, a leader who shepherded the firm for four decades. They discuss great founders, governance, Sequoia's global expansion, mentoring the next generation of investors and more. (00:00) Jason intros today’s legendary interview w/ Doug Leone of Sequoia Capital (01:14) When Doug Leone got his start (11:00) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/TWIST (12:23) The impact selling secondary shares has on founders (15:43) “The founder’s job is to make the receptionist rich” (21:14) First Republic Bank - Discover what a long-term financial relationship can do for you. Visit https://firstrepublic.com/startup today to learn more. (22:15) Mentoring the next generation of investors (30:51) Linode - Apply to their Rise program for founder-led, early-stage startups and get 3 years of discounts at https://linode.com/twist. (31:58) Sometimes incredible companies make the founder (34:07) The greatest founders Doug has worked with (46:30) Providing companies with a running start, but not doing too much (53:10) Investing in China (57:15) Entrepreneurship in Europe (01:11:06) “Hope is not a plan. Let’s make a plan. Check out Sequoia: https://www.sequoiacap.com FOLLOW Doug Leone: https://www.linkedin.com/in/douglas-leone-a2714/ FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

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 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 is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch, use Offer Code Twist to save 10% off your first purchase of a website or domain. First Republic Bank, where everybody gets a personal banker who's reachable by phone, email, or text, and through First Republic's banking app. Learn more at firstrepublic.com slash startup. Member FDIC, Equal Housing Lender. And Linode. Startup Program is built specifically for founder-led early-stage startups. It's called Rise, and it comes with a three-year discount program and tech consultants to help

with infrastructure growth. Apply today at lanode.com slash twist. Hey, everybody, welcome to this week in startups. We're really excited to have our next guest on. Doug Leone 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 and be a scout for Sequoia when they started their Scouts program. And he has been, well, just an amazing force in venture capital, especially on international expansion and supporting some of the greatest founders in the history of capitalism. Full stop. You guys know all the companies that Sequoia has backed. And we've got a great hour with Doug today to talk about what he's learned about

entrepreneurship, venture capital. Welcome to the program, Doug. Thank you. And thank you for reminding me that you were graduating high school when I joined Sequoia Capital. It's a nice start to a podcast. Yeah. I mean, things have changed dramatically, I think, over the past couple of decades. It seems like the last decade has been particularly changed. What was venture capital like in 1988 when you joined? And what drove you to join Sequoia?

Back in the 70s, even before I joined and in the 80s, we were building the infrastructure. structure or what is not called the internet. We're building semiconductors. We're building systems. We're building networking. So it was truly a technology investment business. And in those days, you were not backing 22-year-olds. If you're building a chip, you really 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&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 a product. A CEO can become chairman and move back to CEO in a case of Larry Page. In those days, you couldn't have that. And so it was much more to the point. The words used were quite different. You know, it was two by fours to soften somebody. It was no diversity conversation.

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 Netskip 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 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 that tend to.

skew a bit younger. And the market caps, we saw in consumer investing that we never saw in technology investing. So the exits got way bigger. The all American economy, they discovered technology. Everybody came in. Prices didn't matter. Everybody made the calculus that if you pick them right, it doesn't matter what price you pay, bad habits and 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 happens since I joined the business in 1988. 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.

I've been doing it from a decade when you guys gave me my start as one of the first Sequoia Scouts. Thank you for that. And we'll get into the Scouts program. So when we look at today's market and you see folks raising party rounds, no governance, raising, you know, $10 million on a $50 million evaluation without a prototype or a deck even. Maybe they've just written a memo about what they're going to do. how much does this concern you? 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 founders type standpoint is you start building these habits. Words like, doesn't matter. You know the trap words. Founder friendly. You want to talk about founder friendly, the ultimate trap word. It's like when you meet someone, they call you buddy. That's what Foundly Friendly says. I like to say we're founder-focused.

We'll become friends over time, but we're founder-focused. That concerns me because bad habits start being built. And I've never been involved with any startups that has had a rocket launch with no bumps. And unfortunately, these bad habits really come home to Roos when you have a little bump. Suddenly, cash matters, habits matters, the type of people the higher matter. All the things that didn't matter suddenly matter. So it concerns me 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 saves calculated into the founder having lost 54% of his or her company after the series A completely breaks my heart. And so it concerns me a ton from the entrepreneur side. It also concerns me from the investor's side because quite frankly, the best relationships are win-win.

Founders have to win, 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 hell from Sequoia, a little credibility, if only that can help to recruit. And if the founder loses that, and it's just as 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. So actually, it concerns me quite a bit. Yeah, it does seem that this trend of not having governance and doing these party rounds and nobody leading means nobody has skin in the game. And I think what, you know, my relationship with Sequoia and what I saw up close in 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 and 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, whether it's WeWork or others, where the founders had a lot of power, the governance was very weak, and things went off the rail. So what does good governance look like in your experience? It's not a uniform answer. I can argue both sides. There's the WeWork side where it didn't work to have founder control. Conversely, Mark Zuckerberg almost lost this company because the environment. investors wanted to sell it. So a lot of it is a case by case. I'm in business, a new bank with

David Veles. 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 it's a whole people who own three shares. And so who do I trust more? An accomplished founder or a board that's not vested in. So my answer to you, Jason, as much as you might have expected, I was going to say good governance is a balance, 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. Or maybe you've got four founders.

They all want to be on the board. I've got little tricks. If you 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 two and against two, we got gridlock. So I was on a board of a company with four founders on the board. I said, I'm good with that. One condition.

If two, you're against two, then I come in. And so there's this little things you do to make sure the company can survive and excel and endure these predictable founder issues that may arise when you've got too many chickens in the coup and so on. but there is no one answer. Listen, Squarespace is the platform where you can build or sell anything. You know Squarespace, it's the best. We love it here at launch, and we've used them for a bunch of our different projects.

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to save 10% off your first purchase of a website or a domain. Just build it on Squarespace.com slash twist. That absolutely makes sense. Let's talk about the impact. selling secondary shares had on founders. I think there was this perception. This would be the end of the industry. A lot of people came out against it.

Hey, founders shouldn't be able to sell until the IPO or the exit. But then we saw something strange happen, and I think you guys had obviously the closest view of this. YouTube had to sell early. Obviously, they had a huge lawsuit. And that 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, maybe the founder just, you know, made a mistake.

I don't know. How do you look at keeping founders in the game and keeping them long-term greedy as opposed to short-term and the impact that secondaries has had on the industry? The thing I find really offensive is when a Series B firm and 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, saw some shares, will increase the pool, we'll re-up you, forget about those 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 shi-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.

Not cheap 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 simple because $100 million sounds like a whole pile of money. I was in a board of a company where the founder. is one that sold 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.

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. Also, a founder, he needs a 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

caveat while everybody else is at 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 equally. I think the founders should be no different than a receptionist. In fact, the fact, the fact, the found his job is to make the receptionist rich. If the founder makes the receptionist rich, I guarantee you everybody 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 these 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 10 each. We're done. Whereas, hey, 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 re-up 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%. 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. Wouldn't that be a much better practice that the CEO getting re-opted or the secondary was done after the investment at a board meeting with proper diligence and a proper process? Look, we have had a number of firms and they're 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 a 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 way, either way.

Yeah. Yeah. I mean, this is a long-term game that we're playing here. And 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's 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.

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'd know in the public markets, don't you? 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 with Cisco system, I think, at less the $500 million market account. And, you know, what did that thing end up to be worth? We were a lot more careful with Yahoo and Google and Service Now 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 holding, and there 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-win? What I mean by win-win, well, win-win-win.

Founders first, limited partners, in our case, 70% on 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, we'll help you manage your distribution so you don't sell the day you get them, hold them for the long time. 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, then not everybody can replicate. Because, you know, 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 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 so we can surfounders better. We don't have to flinch as much and so on. So we had this notion that we had an asset, and Rulov really is the one that took the lead. You know, it was CFO of PayPal and an IQ, God knows how high.

I figure out how do we take advantage. But we all had the insight that there was an advantage. It's Roloft that developed it into a product. Listen, in business and in life, long-term relationships are the key to success. First Republic Bank believes they're also the key to your financial health and well-being. That's why every First Republic client gets their own personal banker to serve as their guide, confident, and single point of contact. Have you ever had money issues and not been able to reach your bank quickly?

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startup today to learn more. That's firstrepublic.com slash startup. Member FDIC, Equal Housing Lender. 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, 10x, 20x, 50X, X, 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 me. So prior to answer your question, I want to make sure the audience knows how seriously we take our role. On one side, we have mostly nonprofits, whether it's women's rights or African American rights or under privileged kids like me that couldn't have gone to college. That is really, 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 Sequo is in the middle of this. How privilege is that role? And we take that extremely seriously. Now,

When we asked LPs how much they would convert, they had public holdings. You have a choice, Mr. L.P, or Ms. L.P. You can either get the distribution or let us manage. I'm happy to say the 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 of cash, too, the so quite capital. And furthermore, there was a lot of capital from us, the general partner. is the investors of Quay 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 when these companies, how long these companies can grow than us who are actually sitting on those boards? 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

amount. It doesn't mean every company. It doesn't mean every company, but it does mean a number of them that we've been investors with. 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 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 Rulov joined the firm, and now there's a whole other generation I'm meeting at Sequoia. How do you train them of how to behave and how to be supportive even when you know, hey, this company's not going to be the one that makes the fun? First, it all starts with the type of people that you pick. And the type of people that we pick, I'd like to say they were not the quarterback of the football team in high school.

There were the loaners shunned to the side a bit, too much IQ, a little quirky and so on, and they have a chip in their shoulders. They are pissed off. They'll always be pissed off. But within that, there 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, you know, life reason, no means reasons, who are driven like crazy, sometimes because of injury, emotionally an injury, that are good souls when you peeled the onions. And we put them in an environment of trust, both compensation trust, we're relatively flat, decision-making trust, give credit trust, give attractive deal source.

Doug Leone didn't do service now. Pat Grady's the one who sourced it. Alfred Lynn, he joined us right away. He got Airbnb. When most firms will give you the crappy deal, we'll give you the wonderful investment, 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 secret. Most investors make the calculus. I see, you know, if a company's 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 boat in our body that can do that. Okay. I could be on two boards. The 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 for those of you that have children,

you have children 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. 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 a husband, that have wives and children at home,

there are wives or a husband and children at home. How, if you 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 ask 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 references that count in the same way that you learn more in failure than you do when things are nice and rose. Another thing that has changed the industry was Sequoia's inside rounds for WhatsApp. 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, it 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. We've done that a whole bunch of other times where if a company's working, We vertically integrated. 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 is 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 latest stage round along with other people. But the notion is we have a nice stable of companies like, Stripe, C, venture growth, or new bank, party one, C, 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 rifle

said, I've got your Rolodex, let me go get a second Rolodex. So 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 hedge funds to buy shares. And we have a number of IPO shares that we bought and never sold the share. I'm talking we bought five, six years ago. So we truly have the ability to go from idea to IPO and beyond. And why not ride those incredible winners for a very, very long time. And to me, that means 20, 25 years. Cloud infrastructure costs are one of the biggest expenses for startups. I see it. And they're also some of the most unpredictable. It's no wonder that many startups get

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to help guide you in your infrastructure journey. So apply to the RISE program today at Linode.com slash twist. L-I-N-O-D-E-D-C-com slash twist. Okay, so now we're looking at a 20-25-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. Mark it was hot. they dragged them on for a year, couldn't get the deal closed, and the company, Dordash was facing the risk of ruin. You guys came in and saved the day with a pretty large round and a pretty risky bat. 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 those situations, those founders tend to be raised a show. There's nothing like being a depressive 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 sloppy run company. I won't mention name, but we have those. 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 it at 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. We organized around, 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. Yeah, 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. It makes you. That's exactly right. 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 people, getting the product to market, and then getting to 10 billion in revenue, 100 billion in revenue? Who are those founders who crossed that chasm? So two founders for different reasons. The first is David Volez of Newbank. One of 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, well, it's an associate from Francisco Partners 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. 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 optimistic. I'm not commenting about the very next quarter or anything of the source. Sure, of course. The other person, for a very different reason, was Fred Ludia's service now. And there is a man who started a great business, incredible product market fit, and had the courage to look in a mirror and say, I don't want to run the company.

I'd just like to code. And then it became an issue of building the trust so he and I can find him as business partners. And to me, there's a lesson there because it all sounds great. You're young. I want to be the leader. I want to be the founder. But sometimes you think you want to be the 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 a cheek of executive offices? I want to run product. And it was a bit of a chance he took because he put his trust in me.

He had known me for six months or in Sequoia. And we found him Franks Lutman 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. 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. Sluven's quite an executive. Maybe you could speak a little bit on that guy's ability to execute. I just read his book and had him on the podcast. I mean, he's serious about running a business at a high level. He's three for three. And I'm not talking three for three when the 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. The company was selling things, but too much the services. In a case of Snowflake, he also had to make some moves.

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 dares 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 Franks Lutman, but if you have to get one thing right, what is it? Because I wasn't clear after those seven.

And this seal was able to articulate it, which gave me great confidence that he had clarity. And so in my mind, I've never met an executive more capable than Frank Slooper. It's pretty incredible what he's done. You're 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 and peace, Don, a juggernaut. And we should talk about him a little bit in the founding of the firm. let's talk first about Silicon Valley is the 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, you know, in four different directions and companies are all working remote. Seems to be working, but something seems to have been lost. What's your sort of handicapping of what's happened in terms of all these other centers

of excellence, whether it's Austin, Los Angeles, New York. Florida, Miami, as well as this work from home trend. Are great companies going to be made with everybody working at home or do people need to be in the headquarters and be at the locus of power 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 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 politician. 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, has spread throughout the whole 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 to 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 by Silicon Valley and then China and then India because that looked more than value than go to L.A. 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 here to continue. So that's the issue in Silicon Valley. What was your second question? You asked me so many questions. And people working

remotely, people have seemed to gotten used to this, the concept of coming to Silicon Valley and going up and down, Santo Road, doing your eight, nine, 10 meetings, getting two term sheets. It's now moved to Zooms, 20-minute Zooms. Maybe people will 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. Something seems to be changed there too. 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 better 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 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 what 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, telesalespeople, for example. And I know we are leading with, we now have the product led growth and all the, those good things. But if you've got 10 salespeople, I'd rather have them in one room.

I'd like to see them, let them learn to one another, let them get the energy, go out for a beer 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 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. Yeah. You know, it's shocking to say that. I mean, mothers have gotten used to raising 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 reach people at home a lot and the wrong hands of their darn cell phone at 3 p.m.

But you've got this two hours of commute time that you no longer have. And so that's time they can spend either working during 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 cohesity and some rah, ra, rah moment. It's tough to have a rah, ra moment with 50 employees in 50 cities. It does feel like, yeah, that is something I've seen is people, especially young people now with this work from home trend, they've never been mentor, 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. 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 the esprit of corpse is gone. It's tougher for young people because at the end of the day, if you and I work in the same office, you may give a presentation.

I may have our opinion of you. I also build my opinion from the 20, what a cooler conversations. I have. Are you a good guy? How do you thinking about other things? That is what essentially is gone. And now I get these snippet from this work interaction we get. And all these other data points of what I think you are as a human being that may make

your great leader, I may be missing those subtlety. So I actually feel bad for younger people. They're the ones that are suffering the most from this, in my opinion. Yeah. What do you think about these venture capital firms, we'll 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 great talent, high-level talent, but now I'm seeing venture firms doing the marketing for their startups and the HR, 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 there 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 on this like higher level of service from firms that is being pitched? So I've seen no models and I'll tell you how we do things. We believe you want to teach a person to fish, meaning if you are a founder, 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 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 U.S. 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 faster 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, I never got a customer. You know,

that's wrong. And the other thing, uh, doing, if you will, too much where the car competency, where the DNA is not built by the founder of 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 him in second grade and how 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 a source of some core competency that they got a first time founders have never, a first time founder may have never dealt with any charge of you. They may have, they've never even done recruiting. And we've seen it. 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 recruit a VP of HR. Okay, a lot of companies raising a lot of money at very high valuations. We talked about 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 is 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 they're two or three years out now from the valuation they closed last year? And so we chuckled because all the hedge fund investors, they used to 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, you look at 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 in 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 company have been overfunded, the luxury 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. And so to me, it's case by case, and a steady hand. Right. And when you have new entrants in the markets, these hedge funds who dip down, they're not even taking board seats. A lot of them are just dumping the money in and, you know, 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, Lena Khan, and I was just watching an interview with her. And we've now shifted the lens, or 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 encumber competition in the future?

This seems like an impossible test to administer. My answer, 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,

to limit misbehavior, I would love to see that. But I trust the government less to come up with that than just leave it a heck alone and let technology do its thing. I'm always mindful that if Zuckerberg didn't buy Instagram, Facebook would probably be gone. So I trust technology to do its thing. More than I trust regulators to get it right. I hate to sound so harsh, but I actually have that as an opinion. Yes, you do have large companies.

I won't say in 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, 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 as more, let technology do its things and only go after the extreme cases because you have a greater chance of being right picking on those that coming with holistic solutions that retrospectively may have done something that you thought that may have done when in fact they wouldn't do that. Let's talk about China. You guys were very early amongst the earliest to set up shop there. Things changed radically over the last couple of years. Is this still a great place to invest?

And what's your thesis on engagement in China and investing? 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 U.S. made from China, meaning that we contribute to a pool, they contribute to a pool and we all take the money out. So we all have different kind 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 a Chinese founders here and we're competing with NEA, I'm just speaking in an NEA now, and they have a China operation that we know where's the Chinese founders likely to do business with us and so on? 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 in the military. It's no one's interest to do that in any geo. So I just want to lay those 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 eventuality to be perfectly frank. 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 services firm of size is operating in China. We're operating China. Of course, we're the technology leaders. So there's a little bit of a spotlight on us.

But we've done, I think, everything right for America. We've done, 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 protect, you know, just to protect our country. 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 is doing is promoting. equity, if you will, one. Two, he doesn't want any company to be overly powerful.

So he's told that tech company 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 a paying. So that side has some clouds on it. Move over to EV. Move over to robotics. Those are wide open.

Move over in financial services. Those are wide open. So a lot of it is being on the right side. or 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. 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. 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 of 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 there. What are your thoughts on the European entrepreneurial marketplace? So we looked at Europe, first of all, as an immigrant, I would have loved nothing more than the Portofino office.

I joke at Sequoia. If you've got a deal 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. I made it very clear to everybody at Sequoia. One, two, I looked at Europe twice and I saw what you saw. Until we noticed in the last five years these market leaders called Klarna and Unity and UIPath coming out of Europe, we took note of that.

And I'd argue we went to Europe maybe a couple of years too late. We've actually, as part of our program, we, while we don't, 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 a fairly high-level conversations, including some more coming, or what it takes to deploy tech in Europe, whether it's friendly tax laws, don't get tax 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 U.S. So not all countries are going to move overnight, but they certainly have 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 ongoing conversations with senior government official. I'm talking to the prime minister level about some of these issues. Is the number one thing how they look at employment and the sort of flexibility of 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 in 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. It's hard enough to build to start. 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 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, what you see is hardware tech. But it's changing. It's changing real time. It's going to take another four or five years. Let's talk about participation in the start. startup market equity crowdfunding, allowing civilians, non-accredit investors to invest in startups. We have syndicates. I run one. One of the larger ones. You have Angel List. And a lot more access, microfunds happening. Many people starting these three, 10, $15 million funds, all this activity at the early stage. This is a net benefit to the Stardic 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 that you can go to Las Vegas and lose a million dollars. But God forbid, you can invest 50K in a startups. I 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 a, 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 normas on our risk, but you know after a year or so, they're going to be gone. And somebody's 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-term.

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 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, that equity is going to be worth much more and you just need to be judicious. As we wrap here. For a tenth of a percent to a wonderful engineering candidate, when you sold 28,000,

percent for $500,000. I find that always shocking. Yeah. Luckily, you know, the thing I've seen now is when we get on cap tables 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 can go down.

So it does feel like there's a little cleanup going on when some of these things get broken because how can you invest in a company? The founders only own 20%. I mean, 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, but we have to fix this a little.

Maybe I get 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. It's a smart decision by, by the original investor. And we've seen that a number of times. 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 to be a legacy, you're part of that legacy, and now Rulov and Alfred and this next generation. Maybe you could talk a little bit about Don what made him so special. So, first of all, I adored Don Valentine.

But warmness would not be in the top five adjectives that I would describe them. Don was shrewd, tough, diabolical, and when he was angry, 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. It 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 father 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 him. 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 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 on less asked. and it 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 careful not to be that. So it was an evolution of a man from a tough semiconductor, after 1970, you know, two by four mindset to something more akin to what the 90s are required, a much more generous man later on, a softer man, but it was a metamorphosis. And that to me was the most impressive thing about Don Valentine's.

But warm, here's a little story that's in a book. Once I attended a presentation as an associate with Don, we left a presentation, Don left a note with green ink. He only wrote in green ink. He left that on a table for me to see. Doug, dash, not fit to listen to founders. Left that on a table for me to see. That was my feedback in the way I was questioning founders.

Wow. You learned 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, not memo. That note 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 greatly. And boy, he changed my life. He gave me a shot. Okay. We'll end on Michael Moritz and Rulov. 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 Ruloff. Well, on Michael, keep in mind, he is a Brit. He is self-contained. He is strategic as Hag. Things four steps ahead. You can't have a conversation with him without him asking all the questions and you're providing all the answers.

Three word questions. You're talking for 20 minutes. Not easy going 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 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 meaning. I have to go look it up. And that's a true story, by the way. 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, who I thought, maybe had 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 it's a great sense of pride. And I think once we both step away from Sequoia, it's going to 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 that kind of relationship. Creative tension. Always great for the business. Rulov has really grown and mature as a leader.

Rulov, younger man, driven, a little more emotion that he has now, but heart incredibly in the right place. He wants to do the right thing for everybody. And I would say that Rulov is as good a leader as we've had at Sequoia, certainly better than I have been. I can tell you, I look at Rulov and I don't hold a candle. to that man. By the way, I think the same thing about Mike Morris. And the beauty is that we all stand in each other's shoulders. So part of it is predictable. Rulov should be better than I because he was

standing in my shoulders. But I could not be more pleased with what Ruliffe has done in the U.S. And I would forecast the Sikor's best year are ahead of us due to not only Rulov, but the team we've assembled that has many other names, many other names. 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 handle it? Do you think you can handle being out of the game and not in it?

The answer is absolutely yes. Well, one at say one never knows. That's the honest answer. But I've been out of for 35 years. If truth be known, I force one more foreign cycle on myself without losing an inch. The thing I don't want to be is the guy who's 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 a rule up 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 idea is not a dominate. and he and I were talking about strategic move four years or now. So there's 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 enough. At least as a starting point. On that, I just want to end with a thank you. I was a rough around the edge of as entrepreneur.

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 stopped me right there. I said, Jason, let me stop right there.

Hope isn't a plan. let's make a plan. And then let's talk about the plan. And anybody who's ever worked with me, any founders ever work 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, 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. It's a true honor. Thank you. Thanks, Doug. All right. We'll see you all next time. Bye-bye.

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 the syndicate.com slash SaaS, S-A-A-A-S to apply to raise from the Sass Syndicate. And you can join Jason's syndicate of over 9,000 accredited investors at the syndicate.com. Producer Justin here, 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 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 Remote Demoday.com.

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