Qubit: Roelof Botha (Sequoia) on Founder Prototype
Roelof Botha shared the following on The Tim Ferris Show in August:
95% of Sequoia LPs rolled over into the new evergreen fund structure
Over a quarter of the NASDAQ's value are companies that were backed by Sequoia
Sequoia turned a $140m gain to more than a billion dollars by holding on to Square years after it IPO'd
Also, the ideal founder prototype are those that are truly exceptional and not easy to get along with. Only they are willing to change how things work and transform an industry.
“So we actually talked about whether we should raise our fee structure, because people were still going to invest in us. And we actually made an affirmative decision to not do that, because we are very happy with what we earn, and we appreciate that the majority of what we generate goes to great causes. It goes to education. It goes to medical research, poverty alleviation. The Ford Foundation was helping to fight apartheid in South Africa in the 1960s, before I was even born. So we’re proud that these are the people we work for. Because we’ve had such a long history with them, we invited them to roll into the Sequoia Capital Fund, and 95 percent of the dollars that were eligible to roll into the Sequoia Capital Fund did. So, they are the same investors that have rolled into the structure, and we have had decades of experience with them. We have clients that have been clients of ours longer than I’ve been alive, and there’ll be clients long after I’ve gone, and that’s the way we want it.”
“I mean, we’re blessed by having the history we do. So the companies that we backed when they were private today account for over 25 percent of the total value of the NASDAQ.”
“Over a quarter of the NASDAQ were companies that we backed when they were private. No other venture firm comes close. So that is an incredible achievement, and it means that we’re a magnet for other opportunities, often because of sector expertise, or experience.”
“Now, I’ll give you a concrete example. At the point that Square went public, the gain for our limited partners was about 140, 150 million dollars at IPO, and we waited. We waited several years, in that case, to distribute, and we ended up generating well north of a billion dollars for our LPs in that case, by being patient, because I was on the board. I’m still on the board. I’m involved with the company. I understand their prospects, and I just had a different view that the company’s share price eventually was going to catch up with its performance.”
“… [Don Valentine] pulled me aside and he said, ‘There’s a two-by-two matrix of people we get to invest in. Exceptional, not exceptional, easy to get along with, not so easy to get along with. Your job today, Roelof, is to figure out in which of those four quadrants we normally make money.’”
“Well, I think you have an intuition for it. It’s exceptional, not so easy to get along with. The reason it’s — when you think about the founder prototype or personality type, most of us encounter challenges in the world and we just let it go. ‘This is difficult. This doesn’t work. This frustrates me,’ and you just go, ‘Ah, whatever.’ And you move on to the next thing. Founders are these people who don’t accept the way the world is. They want to change it. They encounter a frustration and they do something about it.”
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