Sequoia Capital invested early in Google, Nvidia, and Apple. Can Roelof Botha keep the legendary venture capital firm ahead in the AI future?

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Sequoia Capital invested early in Google, Nvidia, and Apple. Can Roelof Botha keep the legendary venture capital firm ahead in the AI future?

By Michal Lev-Ram | Fortune Magazine | August 2024

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“Soccer is 90 minutes of pretending to be hurt when you’re not,” Botha tells the author. “And rugby is 80 minutes of pretending not to be hurt, with blood spewing on your face.”

Botha—who’s now the head of Sequoia Capital, one of the oldest, largest, and most successful firms in venture capital—and rugby will come up again and again. Botha cites lessons from rugby in talks with founders and colleagues, and watches it devotedly while he exercises. The game has provided him with endless analogies about the value of teamwork and resilience—and some decent one-liners. 

While some soccer fans might quibble with the comparison, rugby is, indisputably, not for the faint of heart. Then again, neither is Botha’s other passion: venture capital. The industry that has become a financing pipeline for young, innovative, and risky companies is known for dramatic booms and busts—and it’s coming off a particularly harrowing cycle. A COVID-era bump in demand for all things tech helped VC funds raise and invest record amounts in 2021, as an unprecedented 340 new U.S. startups achieved “unicorn” status, or valuations of $1 billion or more. Then, in 2022, came a correction, triggered by high interest rates and a slumping stock market—a decline that bloodied balance sheets and left many people wondering whether the VC model itself was broken. 

Sequoia has led investments in tech titans including Apple, Cisco, and Google, plus newer names like Nvidia, Airbnb, DoorDash, and WhatsApp, minting billions in returns along the way. More than 25% of the overall market capitalization of the Nasdaq—more than $7 trillion, as of mid-July—is composed of Sequoia-backed companies. Sequoia’s kingmaker position is also evident in less quantifiable ways: Securing dollars from the firm is one of tech’s ultimate seals of approval. 

That stellar reputation is precisely what makes Botha’s job so hard. The task isn’t so much to fix what’s broken as it is to keep what works from breaking—and not to be the guy who ends a five-decade winning streak. And what’s kept Sequoia at the top in the past won’t necessarily keep it there—especially in a VC industry that’s scrambling to adapt. 

That said, there’s a reason Sequoia is the alpha: Its culture from the get-go has been one of near-paranoid competitiveness, ruthless honesty, and a constant need for change. Botha has become a paragon of these qualities: His probabilistic-thinking acumen and factual recall make him a force at decision-making time; his intense curiosity helps him question old ways of deciding. Partners credit him with reshaping the way Sequoia thinks—just in time for a moment of industrywide reset (not to mention an AI revolution). 

“We’re only as good as our next investment,” Botha and his partners like to say. But any fear of failure on Botha’s part is tempered with a relentless drive to master whatever he pursues, something he internalized as a boy in South Africa, and, yes, on the rugby field. 

As for his own success, he’s changed the metrics. It’s no longer his own goals, or the “10 to the power of 9” number in the corner of his notebook: It’s collective success that counts. “For me, it’s not personal winning now,” says Botha. “It’s the winning of us as a team.” And a tight-knit team is invaluable—because in venture capital, just like in rugby, another fiercely competitive scrum is always just around the corner.

3 key takeaways from the article

1. Sequoia has led investments in tech titans including Apple, Cisco, and Google, plus newer names like Nvidia, Airbnb, DoorDash, and WhatsApp, minting billions in returns along the way. More than 25% of the overall market capitalization of the Nasdaq—more than $7 trillion, as of mid-July—is composed of Sequoia-backed companies.
2. That stellar reputation is precisely what makes Botha’s (the CEO) job so hard.  
3. That said, there’s a reason Sequoia is the alpha: Its culture from the get-go has been one of near-paranoid competitiveness, ruthless honesty, and a constant need for change. Botha has become a paragon of these qualities: His probabilistic-thinking acumen and factual recall make him a force at decision-making time; his intense curiosity helps him question old ways of deciding. Partners credit him with reshaping the way Sequoia thinks—just in time for a moment of industry wide reset (not to mention an AI revolution). 

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Topics:  Financial Markets, Strategy, Business Model, Leadership, Teams, Agility, Rugby, Residence