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Tuesday, 29 June 2010

VC Factsheet: SEQUOIA CAPITAL

Company summary & history
Sequoia is a Venture Capital firm founded in 1972 by Donald Valentine. It has funded a large number of very successful companies including Google, Yahoo and Paypal. Just under 15 percent of NASDAQ’s value is made up of companies that Sequoia has funded. They invest in seed, early and growth stage companies in all sectors with a focus on services, software, systems, and components. It has offices in the USA, India, Israel and China – where it seeks to invest in early and seed-stage businesses. For growth stage investments, the firm claims not to limit itself to these countries.

Key people
Douglas Leone – partner since 1993. He focuses on internet and communication investments. Forbes named him on their top 10 venture capitalists in the US list in 2001. He holds an MS in Industrial Engineering and an MS in Management from MIT. He also belongs to Cornell University's Private Equity Advisory committee.

Mark Kvamme – Venture capitalist with Sequoia since 1999. He focuses on enterprise data management software, consumer media and advertising services companies. Before joining Sequoia he was CEO of CKS Group, which integrated advertising and marketing with technology. Mark has a BA in French Economics and Literature from the University of California at Berkeley.

Michael Moritz – British venture capitalist with Sequoia since 1986. He works with internet, outsourcing and technology companies. Formerly he was a member of the board of directors of Google inc. Michael has an MA in History from Oxford University, and an MBA from the University of Pennsylvania. He achieved the number one listing on the Forbes 'Midas List' of the top deal makers in the technology industry in 2006 and 2007.

High-profile deals
Youtube – In November 2005, Sequoia made an initial investment in Youtube for $8 million, and increased this to a total of $11.5 million by April 2006. In return, Sequoia took an equity of about 30 percent, and following the sale of Youtube to Google in October 2006 Sequoia was thought to have made an estimated $480 million profit. The investment was overseen by Roleof Botha who sat on Youtube's board of directors before its acquisition by Google.

Google – Sequoia invested $12.5 million in Google in June 1999 in return for a 2.5% equity. Its stake was worth $1.5 billion when it floated in 2004, a return of 120 times its original bet of the search-engine giant. Michael Moritz, general partner of Sequoia Capital, sat on the board of directors along with John Doerr of Kleiner Perkins, which invested an equal amount as Sequoia Capital and took the same amount of equity. Sequoia's exit strategy was an initial Public Offering (IPO).

LinkedIn – Giving $4.7 million as capital, Sequoia invested in LinkedIn in November 2003 in return for equity. Mark Kvamme sat on LinekIn's board of directors. Since investment, the number of visitors to LinkedIn has grown by over 3875 percent.

Requirements for capital investments in start-ups
For seed-stage companies, Sequoia Capital invests between $100k-$1m in start-ups across the energy, financial services, healthcare services, internet, mobile, outsourcing services and technology markets. Seed-stage investments can occupy space in Sequoia Capital's offices to start growing their business idea.

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