David Rosenthal: belief

Transcript context

…Exactly. Despite some friction points, we live in an efficient market and if it's truly a great opportunity then capital will flow to go and fund that thing. The world would look no different today if there was no Sequoia. I think I fall slightly toward the former part of that scale and I’m not willing to say that we wouldn't have some of these amazing technology innovations without Sequoia. I do think in just pouring over the hours and hours of reading that we found about Don and really learning about the history of this firm, Don played a very active role in building a lot of companies that they invested in and deserves a lot of the credit for that. Listeners, let us know how you like this type of episode focusing on venture firms. We, of course, love it as venture investors ourselves, but we’ve been talking all about Sequoia in this episode. There is really along the exact same timeline, there is a perfect example of what would have happened otherwise and that is Kleiner Perkins, which over this timeframe that we’re talking about was equally if not arguably more successful than Sequoia. What's really interesting and we’ll dive into when we ultimately do an episode on Kleiner, their philosophy was quite different and was a lot more interested in the entrepreneurs and the backgrounds of the entrepreneurs then necessarily where Don and Sequoia were. I think to my mind what would have happened otherwise, of course Silicon Valley would have happened, of course the modern venture capital industry and startup industry would have happened even though Don helped catalyze all of it, somebody would have and certainly Kleiner Perkins would have indeed. I don't think there would have been as many chances taken and opportunities given to the “Ho Chi Minhs” out there that Sequoia was willing the fund. It wasn't just in those days. Look at Airbnb in the early days and Sequoia is extremely prescient early investment in the three Airbnb founders. They didn't look like what a prototypical founder looked like at that time. Far, far from it. I think it's Sequoia and Don's DNA coming from a true incredible marketing background and markets focus that maybe wouldn't have developed in the same way without Sequoia. Yeah. One way to look at this is if the Kleiner Perkins in 1978, you are backing founders and outsourcing a lot of your judgment to them and you're just saying, obviously they weren’t hands-off, but you run the company and the reason I'm investing in you is because I trust you to figure out how to run this company. What Don was looking at is, you’re really onto something in this killer market. We’re going to go build this thing together and I’m going to help you do that. The downside to that that we haven’t painted yet is if you’re a founder that believes that you need to be the CEO of that thing forever and you’re in a market that deserves a team to really go and value maximize the way to tackle that opportunity, the terms of these investments, especially at this time were that often, firms would own 33%-51% of the company. They would have the right to buy the rest from you. They will have the right to replace you. All of these rights. Of course, much of this still exists today. The job of the board is to hire and fire the CEO, but it was much more prevalent back then especially within Don's view of the world is that I'm building this company with you right now. This company may outlast your leadership.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.