The Sequoia secret: hustle and hard work–VCJ report

Sequoia Capital partners have built a reputation over 43 years for hard work, straight talk and a deep commitment to making portfolio companies successful.

The firm may rethink its investment strategy from time to time, currently turning heightened attention to China and India, but the Sequoia culture doesn’t appear ready to change.

This is according to Sequoia partners and outside GPs who have worked with the firm on numerous deals. Many outsiders say the firm remains driven by a sense of urgency, aggression and willingness to tap high-quality resources to solve problems, which is not always the case in the venture business.

It is a modus operandi that sparks a great deal of attention, admiration and even a touch of unease.

“There is a high-hustle factor,” said Joe Horowitz, a managing general partner at Icon Ventures. “They hustle. Yet they are very button down and professional.”

Horowitz and others say Sequoia’s track record contains plenty with which to be impressed. The firm’s ability to transition from one generation to the next is one example. The shift from early investors, such as Donald Valentine and Gordon Russell, to Michael Moritz and Douglas Leone, and then to Roelof Botha and Jim Goetz went without a significant operational hitch.

Another example is performance and the ability to repeatedly get into big-outcome deals. “They have been able to demonstrate successful outcomes on a consistent basis year after year,” said Horowitz, who has co-invested with Sequoia in more than 10 deals, including FireEye, Palo Alto Networks and Aster Data Systems. “It is more rare than the norm in venture capital.”

Enabling this success is an ability to detect promising founders early on. “They are just unbelievable at it,” said Hemant Taneja, a managing director at General Catalyst Partners.

One secret is they resist the temptation to let their own view of things color their investing. “These founders have an over-the-horizon radar,” Taneja said.

Another is commitment. Taneja co-invested with Sequoia in Stripe and said the firm is deeply committed to the company.

Partners have an “unbelievable work ethic,” he said. “They are the hardest working guys in the business.”

Entrepreneurs confirm this commitment.

“They’ve seen the movie before,” said Ryan Smith, the CEO of Sequoia portfolio company Qualtrics. “Our VCs are thought partners.”

Smith said he gets a lot of value from bouncing ideas off of Sequoia Partner Bryan Schreier, who has operating experience. Schreier has helped with recruiting, opening up international operations and should be a valuable resource as Qualtrics begins making acquisitions, Smith said.

“My experience has been they are very straight with entrepreneurs,” said Jeff Richards, a managing partner at GGV Capital. “Some entrepreneurs like that and some don’t.”

GGV invested with Sequoia in Percolate, Appirio and Houzz, and Richards said his experience with Sequoia on Percolate has been favorable.

“It’s impressive the way Sequoia continues to get into the top companies in the A round,” he said. “It is not easy to do.”

This story first appeared in affiliate magazine Venture Capital Journal, which is published by Buyouts Insider. Subscribers can read the full story by clicking here. To subscribe to VCJ, click here for the Marketplace.

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