Sequoia Shakes Up VC Team, Sheds Two Crypto Investors

At least five partners at the Silicon Valley venture capital giant have departed in recent months.

(Bloomberg) — Sequoia Capital, one of the world’s most prominent venture capital firms, now looks very different than it did just a year ago – following a turbulent period of market upheaval, a breakup and at least five investor departures.

Longtime partner Michael Moritz is leaving the venture firm to focus on Sequoia Heritage, a wealth management business he helped start, Sequoia said Wednesday. Another senior partner, Mike Vernal, is also leaving, along with Michelle Fradin, one of the firm’s investors behind FTX, and partners Kais Khimji and Daniel Chen. 

Moritz, who had been with the firm since 1986, will take on a greater advisory role at Sequoia Heritage, which is a more than $15 billion fund that he helped found in 2010. A large part of the assets of his family foundation, Crankstart, are at Heritage.

For now, Moritz will continue to sit on boards of various Sequoia companies like Stripe Inc., but will transition out of those roles over time, the firm said in a note to investors that was seen by Bloomberg.

“We are immensely grateful for all of Michael’s contributions,” Sequoia’s Roelof Botha said in the note, citing Moritz’s investments in companies like Google and PayPal. “He helped establish Sequoia as one of the leading technology investment groups in the world.” 

Since its founding in 1972, Sequoia has made rich returns, but has had some recent stumbles. Sequoia was a major investor in FTX, the collapsed cryptocurrency exchange. The move lost the firm $214 million, the bulk of which came from its global growth fund. While the loss represented a fraction of the total cash in the fund, it still caused significant reputational damage for the firm.

Among the recent exits were two investors involved in the firm’s bets on cryptocurrency: Fradin, a relatively junior partner who helped lead the decision to invest in FTX, and Chen, whose Twitter bio describes him as a “crypto maxi.”

Other departing partners are Khimji, who joined in 2019 and focused on later-stage companies, and Vernal, who joined the firm in 2016. Vernal will be taking some time off, according to two people familiar with the matter. His portfolio companies include Rippling and Notion Labs Inc., both of which Sequoia invested in two years ago. He also backed Verkada Inc., a camera company that fell victim to hackers and had to overcome a fraternity-style culture.

Vernal will keep his board seats, a spokeswoman for the firm said. The Information and the New York Times earlier reported news of the departures.

Sequoia has for decades been a stalwart of the venture industry, so the upheaval is notable. In June, the firm announced a major split with its operations in China and India. The move was due in part to mounting pressure on Silicon Valley to distance itself from China as geopolitical tensions rise. 

In that breakup, the firm also spun off Sequoia Heritage, where Moritz is a founding founding limited partner and board member. 

Sequoia’s total venture assets, which are separate from its Sequoia Heritage and hedge fund businesses, are $55.58 billion, according to the firm’s most recent filing at the SEC. That is up slightly from $53.29 billion in the March quarter, but down considerably from $85 billion from its March 2022 filing.

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