I’ve only been in the same room as Sequoia Capital’s Roelof Botha twice, but each time he’s struck me as very upright, and even proper. The sort of person I can’t imagine being harried, frantic, or disheveled.
So, it’s hard for me to imagine what Botha—who became Sequoia’s senior steward in 2022—must have been like playing rugby in his twenties. Then again, in my limited understanding of rugby, it’s a sport notable both for its brutality and the oddly elegant steeliness (and order) it demands. (Oscar Wilde’s famous bit about this: “Rugby is a game for barbarians played by gentlemen. Football is a game for gentlemen played by barbarians.”)
But through that lens, Botha’s love for rugby starts to make good sense. Fortune’s latest cover story by Michal Lev-Ram gives readers a view into how Botha is thinking about Sequoia’s future, at a time that’s complex for the firm and tumultuous for venture capital. From 2019 to the middle of this year, Sequoia has paid out $43 billion in distributions to its investor base (it's unclear how much of this links to the 2021 venture boom that’s since cycled into a bust). Today, VC is in the midst of a well-documented LP crunch, as 2021 valuations come back to haunt the industry at large. And Sequoia has its own frictions: The firm is tied up in some of Elon Musk’s businesses, like Twitter (now X) and xAI. (Sequoia is also invested in OpenAI.) The firm spun off its China arm last year, addressed the implosion of portfolio company FTX the year before, and described 2022 as a “crucible moment” in a memo.
Amid all this, Botha has taken steps to move Sequoia away from the traditional venture model, as Lev-Ram writes:
One of the ways Botha has tried to reinvent Sequoia is by departing from the traditional 10-year cycle of VC funds. Such funds usually reap their returns through startup “exits”—IPOs or acquisitions. But they often miss out on the enormous value that can be created after a company goes public. What’s more, funds’ 10-year timelines can induce angst when exits slow down due to short-term market downturns or crackdowns on M&A activity.
That’s why, in February 2022, Sequoia launched the Sequoia Capital Fund, an “open-ended liquid portfolio” whose holdings include post-IPO equity in portfolio companies, along with allocations in more traditional funds. The firm is going all in, reorganizing itself around this new structure. Botha’s timing was unlucky, as tech stocks tanked that year. But in some ways, that was the point: The strategy is meant to help Sequoia capitalize on investments over the long term, whether the market is up or down.
Botha doesn’t play rugby anymore. But in a moment of skittishness across venture capital, Botha and Sequoia will be well-served by the structured toughness he gleaned from the sport.
The story covers Botha’s rugby past, Sequoia’s future, and much more. This weekend, read the whole story here.
See you Monday,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.
Joe Abrams curated the deals section of today’s newsletter.
