Photo: Sequoia Capital
Alfred Lin of Sequoia Capital will join the board of directors of Airbnb, the lodging marketplace that’s one of the most-watched private companies in Silicon Valley today, Business Insider has learned.Lin and an Airbnb spokesperson confirmed his hire to us on Friday, after Airbnb CEO Brian Chesky announced it internally to the company.
Lin told us he hoped to help Chesky and his team build Airbnb’s “unique culture.”
Lin is replacing Greg McAdoo, who’d previously announced that he was leaving Sequoia. McAdoo led a $600,000 seed round in Airbnb in 2009, making an early and prescient bet on the company.
Airbnb was valued at $1 billion in 2011 and is reportedly arranging new financing which could take its value as high as $2.5 billion. Three million guests booked lodging on it last year, and it opened 11 new offices as part of a major international expansion. It could soon be doing $1 billion a year in revenues, according to some estimates, from the cut it takes of bookings and other services.
So why Lin?
Sequoia, Lin, and Airbnb have a long, intertwined history.
Sequoia backed Lin’s previous company, Zappos, where he was chairman and COO.
While Zappos CEO Tony Hsieh was the happiness-promoting public face of the e-commerce site, Lin was seen by insiders as a key force behind the company’s relentless focus on customer service, which distinguished it from rivals while delivering fast-paced growth. At the time of its sale to Amazon in 2009, it was doing $1 billion in revenues.
Amazon actually approached Lin in 2009 about buying the company, according to an account Hsieh wrote for Inc. magazine.
After the all-stock deal, which ended up being worth $1.2 billion and netting Sequoia $248 million, Lin joined the firm as a partner in 2010.
But in 2011, Airbnb sought to hire him as COO, according to TechCrunch. (At the time, Lin said companies approached him all the time and he wanted to focus on his career as a venture-capitalist.)
There’s one key way in which Airbnb’s story differs from Zappos.
At Zappos, Lin and Hsieh had two board seats, while investors had three.
While they couldn’t force a sale of the company, investors could fire Hsieh as CEO, he wrote in Inc. That prompted Hsieh and Lin to consider whether Zappos and its culture might be better off in Jeff Bezos’s hands than with its venture investors, according to Hsieh’s account.
Airbnb’s board is structured in a way that that could never happen.
Common-stock shareholders—largely its three founders, Chesky, Joe Gebbia, and Nathan Blecharczyk—have the right to elect three board members. Each founder currently holds a board seat.
Sequoia and its other seed investors have one board seat; Andreessen Horowitz and other investors in Airbnb’s 2011 financing elect another board member. Andreessen Horowitz partner Jeff Jordan, the former OpenTable CEO, holds that seat.
The language in Airbnb’s articles of incorporation, which Business Insider has reviewed, appears to give unusually strong protections to the board rights of common-stock shareholders. For example, if there’s a vacancy among the three common-stock board seats, the board at large cannot fill it; only the common-stock shareholders can.
It is a small irony of today’s founder-friendly Silicon Valley.
Lin has ascended to what seems like a powerful role at one of the hottest companies around, a board seat most venture capitalists would kill to have.
Yet its power is circumscribed—in a way that Lin might have wished were true at his previous company.
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