Every new Sequoia investor is required to read one book before they start working. It is not for sale, and you cannot find it on Amazon.
DTV is a memoir of Don Valentine, written by Michael Moritz. Even though Valentine died in 2019, his DNA is encoded into Sequoia, and the book is a manual for how the firm thinks.
Most firms pass culture down by osmosis and hope it survives the next hire. Sequoia wrote its culture down, turned it into homework, and built a set of mechanisms specific enough that the quality of the firm's decisions does not depend on any single partner being a genius.
That set of mechanisms is the subject of this piece.
The argument of Part III
In Part I, I made the case that Sequoia operates as a multi-generational franchise that happens, for now, to be expressed as a venture firm. The founding architecture (naming the firm after the tree, refusing the founder paydown, equalizing carry across generations) is what made fifty-three years of compounding possible.
In Part II, I argued that the brand everyone now associates with Sequoia, the firm that does not lose money and backs founders for decades, was forged after Valentine, by Mike Moritz, Doug Leone, and Mark Stevens in the decade of pain from 2002 to 2012, when the partnership absorbed a clawback rather than push the cost onto its LPs.
Part I was the architecture. Part II was the character. Part III is the machine.
Here is the question this piece answers.
Strip away the individual brilliance of any one partner, and what is left that actually transmits? What are the repeatable mechanisms that let Sequoia hand the firm from Valentine to Moritz and Leone to Botha to Lin and Grady without the quality of the decisions degrading on the way down?
If you are the founder of an investment firm and you are thinking about building an institution larger than yourself, Sequoia is the gold standard. This piece tries to analyze the system that allows for succession.
The rest of this piece is for paid subscribers.
Below the paywall:
The book every new hire reads before the firm lets them speak
How Sequoia actually decides, and why a single "no" can kill a deal
The founder filter, and how it sharpened across three stewards
How the firm manufactures partners instead of hiring them
The narrative engine, and why Sequoia publishes
What actually transmits to a new firm
