Roelof Botha once dressed up as Toy Story’s Buzz Lightyear to meet a new recruit called Jess Lee for Sequoia Capital. Another partner, Jim Goetz, was dressed as the other main character, Woody. They were inviting Lee to be their Jessie. In this respect, the apple does not fall far from the tree. Botha is the grandson of former South African foreign minister, Pik Botha, who was known to smoke skelm cigarettes outside the Cabinet room with ANC cabinet minister Kadar Asmal whom he befriended when they both served in the Government of National Unity in the ‘90s. His grandson, Roelof, who is a UCT alumnus, decided to look for opportunities elsewhere and moved to the United States where he worked with South African billionaire Elon Musk at PayPal. He joined Sequoia Capital in 2003, became a partner and will now head one of Silicon Valley’s oldest and most successful venture capitalist firms. The Financial Times reports Botha takes the reins at Sequoia with a new mandate. He is indeed another South African innovator leading the technology world to infinity and beyond. – Linda van Tilburg
Use Spotify? Access BizNews podcasts here.
Use Apple Podcasts? Access BizNews podcasts here.
Silicon Valley’s Sequoia Capital names new leader
Richard Waters in San Francisco and Antoine Gara in New York
Sequoia Capital, one of Silicon Valley’s oldest and most successful venture capital firms, is changing its leadership as the 50-year-old backer of technology industry titans including Apple and Google passes the torch to a third generation of investors.
Roelof Botha, a partner at Sequoia, who leads its US and European operations, will assume the firm’s leadership in July, taking over from billionaire investor Doug Leone, who will retire aged 65.
The appointment of Botha marks the third transition in Sequoia’s leadership since its founding in 1972 by Don Valentine, a pioneer of the venture capital industry.
The selection highlighted a delicate balance in Sequoia’s global organisation, between its US and European operations on the one hand and its powerful Chinese arm and emerging Indian funds on the other.
In a letter to Sequoia investors, Leone spelt out limits to Botha’s new role that left him with little direct control over the Chinese operation. Under Neil Shen, Sequoia China has backed a number of successful start-ups – including ByteDance, Meituan and Pinduoduo – making the global sharing of profits and power in Sequoia a constant source of speculation.
Sequoia has dropped the global managing partner title that had been given to predecessors, with Botha instead becoming Sequoia’s ‘senior steward. He would set the overall tone for Sequoia, Leone said, as well as being in charge of “centralised functions, including compliance, finance and culture”. An existing arrangement, under which Botha oversees US and European funds and Shen is responsible for China, would continue.
Leone denied the arrangement would leave his successor with less power, and characterised it as part of a two- to three-year transition to a more centralised operating structure that was meant to support a completely decentralised investment approach.
He told the Financial Times that Botha would oversee a new organisational structure including chief finance, compliance, information, legal and operating officers with a global remit, but that investment decisions would be made inside the countries concerned. There would be no change to a profit-sharing system that lets partners benefit from global fund returns in proportion to the contribution made by their region, he added.
“We want to make sure the person who leads isn’t lost to management,” Leone said.
Sequoia has backed many of Silicon Valley’s most successful companies, including Cisco, Apple and Google. In 1996, Valentine turned the leadership of the firm over to Leone and Sir Michael Moritz, who jointly led the Menlo Park, California-based firm until 2012, when Moritz ceded his daily responsibilities due to health issues.
During Leone’s tenure, Sequoia globalised its business and maintained strong returns in an industry where success can be hard to replicate. Its recent successes include home rental platform Airbnb, fintechs Stripe and Square, cybersecurity specialist Okta, and software company Snowflake. Botha has played a large role in some of Sequoia’s biggest windfalls and its expansion.
A native of South Africa who worked with Elon Musk at PayPal before joining Sequoia in 2003, Botha has been instrumental in building a permanent fund structure that he said could grow to as much as $20bn in size. These funds are designed to let the group hold on to investments for longer than a typical venture firm, giving it a better chance of sharing in the huge gains that can come as tech companies mature.
Two investments he led – into YouTube and Instagram – were hailed as successful when the companies sold for $1.65bn and $1bn, respectively, although that robbed investors of much bigger gains had they stayed independent. By contrast, another Botha investment, finance company Block, formerly known as Square, soared to a more than $150bn market capitalisation last year, before falling back.
“His keen instinct for innovation has made its mark on our partnership and on our industry,” said Leone in his letter, which emphasised the permanent fund as an initiative “that transformed our business”.
Copyright The Financial Times Limited 2022
© 2022 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.
