Sequoia Capital is arguably the most successful — and one of the most press-averse — venture capital firms in Silicon Valley, with early investments in massively successful tech companies such as Apple, Oracle, Cisco, Google, PayPal, LinkedIn, and dozens more.
So in October 2008, when the firm made a presentation called “RIP Good Times” to its portfolio companies, the Valley listened. They warned companies to get spending under control and reduce debt, expect lower growth for a few years, and focus on quality businesses.
As VCs debate whether we’re in a tech bubble today, Sequoia has largely stayed out of the fray. But this afternoon, partner Roelof Botha did an interview with Bloomberg West’s Emily Chang and said that we’re not in the same kind of public market bubble. Rather, outsiders are looking at private companies without the benefit of full information and making some snap judgments.
He called today’s market “a shade of grey.”
As he put it:
Often people point to anecdotal examples of private companies that they think are overvalued. And I’m sure in the fullness of time it will prove to be that some of them were overvalued and won’t be successful. But I’m not sure you could point to something systemic that cuts across all of those companies. When I look at some of the companies that we ourselves are involved with and I see how they get written up, it’s from people who don’t actually know the details of what’s actually going on inside these companies. I remember being at PayPal as an executive in 2001 and reading the press articles. I remember one title was “Earth to Palo Alto, they made a mockery of us at PayPal thinking that we were delusional, and no one knew what a good business we were building, and today it’s a $US40 billion public company.
Botha said he is advising startups to raise money while they can, but he doesn’t think there’s a rush to raise because of any “imminent meltdown.”
Sequoia is also a big investor in payments company Square, but Botha did not answer whether he thought CEO Jack Dorsey should take two jobs at once, doubling down as the full-time CEO of Twitter. As he put it, “I think he’s the founder of both companies, I don’t think it’s for me to judge and tell him he can’t do that.”
You can watch the full interview here.
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