Description

Andrew Reed (X, Website, Sequoia) is a growth investor at Sequoia Capital, where he has invested in companies including Robinhood, Figma, Klarna, Phantom, Vanta, ElevenLabs, Mubi, and Strava. He is quietly one of the best growth investors of his generation.

We begin with how Andrew's competitiveness and humanity coexist—the twin brother rivalry, the football player who also did musicals, the Goldman analyst who came to value people over spreadsheets. He also shares how an early lack of confidence helped him become a great observer of people and situations.

We talk through his approach to investing: why spreadsheets are “always wrong” in one direction, how he underwriters revenue growth, and what he sees in the world-beaters he invests in. We discuss several of his most formative investments—Robinhood as a 27-year-old’s first check, and again during the first week of COVID; Figma at a price people thought was insane; and a 14-second conviction on Vanta’s—and what each taught him about conviction, timing, and not flinching.

Andrew shares his perspective on serving as a board member, knowing when to double down, closing deals, and how craft can be a commercial input. We also talk extensively about Sequoia Capital and its legendary leaders, from Don Valentine, to Doug Leone and Mike Moritz, to newly-appointed Co-Steward Pat Grady. Andrew reflects on what it means to apprentice at an institution where greatness is the expectation and the champagne toast lasts five minutes.

I hope this conversation inspires you to show up ready for the day you don't expect, to rise to the stakes rather than shrink from them, and to move through your life and work a little more lightly.

Dialectic is presented by Notion. Notion is an AI-powered connected workspace where teams build their best work. Notion is also where I compile research for episodes and the home of this site where you can find all links and transcripts. My “What are You Building This Year” feature with Notion on Instagram.

Timestamps

(0:00) - Opening Highlights
(2:02) - Intro: Andrew Reed
(3:50) - Thanks to Notion
(5:23) - Start: Humanity, Spotting Weird, and Competitiveness
(19:07) - Investing & Great Founders
(37:53) - Andrew's Style, Pat Grady, and Continuous Learning
(47:31) - Doubling Down and Not Flinching
(56:09) - Empathy on Boards, Learning the Real Business, "Expensive" Prices, and Selling
(1:07:18) - Managing Ego and Becoming a Leader
(1:14:08) - Craft as a Commercial Input, Knowing vs. Feeling, Preparing for Big Days, Becoming a Great Closer
(1:28:39) - Sequoia Capital
(1:38:57) - Don Valentine, Mike Moritz, and Doug Leone
(1:51:29) - Closing Questions
(1:59:08) - Thanks Again to Notion

Links & References

Transcript

(0:00) Opening Highlights

(2:02) Intro: Andrew Reed

(5:23) Start: Humanity, Spotting Weird, and Competitiveness

Andrew: Thank you for having me on your podcast.

Jackson: The first timer.

Andrew: It’s an honor breaking my podcast celibacy.

Jackson: We are going to jump right in. I want to talk a lot about investing, but there are a couple of themes I noticed about you. The first is that you are an elite performer. You are super competitive. You are a growth investor who started at Goldman and played high school and college football. There is a tinge of hardness on one end. Yet, both in your work and personally, there’s also a deep amount of humanity. I’d be curious for you to reflect on how you’ve leaned into humanity over time at Sequoia and more broadly.

Andrew: Growing up, that dichotomy existed at every point in my life. I played sports in high school, and I also used to do the musical. My best friend in high school was not on the football team. My twin brother was on the football team and is my best friend, but I’ve always had these two sides of the brain. I love playing the piano. When I started my career at Goldman, I was the analyst behind the spreadsheet with headphones on late into the night. I was the semiconductor analyst on the TMT team back in the day. That was out of fashion for a long period of time. I wish I had studied harder back then because that would have been good to know over the last few years. When I got to Sequoia, I was very quantitatively bent for the first four or five years of my career. One thing you learn with startups is your spreadsheet is always wrong. It’s usually wrong in the bad direction, and when you’re lucky, it’s wrong in the good direction. The biggest difference is the person running the company and the team that they build. Naturally, you learn that it really is all about the people. Parallel to your work life is your personal life, which changed a lot from high school to college to San Francisco. Growing up around people here in San Francisco introduced new interests and concepts. That is reflected in the things I’ve done in investing and how I spend my time.

Jackson: Another element of that is that a lot of parts of you are in central casting for what you are: a good-looking white dude who works in venture capital, worked at Goldman, and was a football player. I talked to multiple people who know you. One thing our mutual friend and former colleague Matt Huang said is that you are the football player who is also a hardcore Redditor. There is clearly a good amount of weird. My sense is that is part of what makes you not a pure finance guy, and it’s part of what makes you a great venture capitalist—your nose for the slightly strange or the contrarian. I’m curious how you think you’ve gotten weirder, or how you’ve fed that.

Andrew: Going back to my childhood, my main trauma in life was growing up with a very bad stutter. When I first interviewed with Doug Leone, I gave him my resume and he looked at it for twenty seconds. He said, “You went to Amherst, you got this GPA, you played sports, and you worked at Goldman Sachs. There are two hundred people just like you. Why would we hire you?” He said it in a very antagonistic Doug Leone interview way. Two things really motivated me. First is having a twin brother. We’ve competed our whole lives, and that definitely hardened some competitive drive in me. I spent my entire childhood just observing. It is very hard to jump into conversations, do public speaking, or even raise your hand in class. I spent a really long period of my life just listening, and it gave me a lot of empathy for outsiders, for people in low moments, and for people who don’t feel like they fit in. In college, I did speech therapy from when I was a kid up through graduation. That same summer, I went to college and I stopped doing speech therapy. All of a sudden, everything fixed itself. Within six months, I didn’t have a stutter anymore. Now I host the LP meeting and go on TV, and no one sees that side of me because it is literally hard to find. But that element of weird comes from that personal feeling of watching things. When I talk with people who are building companies, many founders are successful and famous now, but deep inside them is the same thing that was deep inside me. People who meet them for the first time today don’t see it, but I feel like I have a unique way of seeing the little kid inside people sometimes. I think that helps with trust.

Jackson: It’s interesting how becoming the version of yourself you want to be doesn’t sound like it happened through a lot of striving. At the very least, the effort toward speech therapy didn’t necessarily do it.

Andrew: In terms of striving, I feel like at so many points in my career, I’ve gotten extraordinarily lucky being surrounded by people who are so good. Sarah Guo, who was in my class at Goldman, was the person who introduced me to Pat Grady. Sarah and Pat are now married. Sarah is an extraordinary talent who has been and will continue to dominate her corner of Silicon Valley. I started as a class of two associates at Sequoia with Matt Huang. Could you imagine a more talented counterpart to be pushing you every day?

Jackson: He was also very much a startup guy at the time, whereas you were not.

Andrew: I hope the associate class of me and Matt Huang goes down in history as the greatest bang-for-your-buck associate class ever hired. We started on the same day, February 18, 2014. I remember meeting Matt for the first time. He was on the growth team at Sequoia where they do a lot of spreadsheet math and cohorts. I had never done an in-person meeting with a founder and didn’t have a network in Silicon Valley. We really leaned on each other for years in an extraordinarily collaborative way. To this day, there are a small number of people who I genuinely feel are superior investors to me, and Matt is one of them. Pat Grady is another. Pat was my direct manager for all my one-on-ones when I joined Sequoia. Matt was the person who sat next to me for five years. Kevin Kelly at Sequoia Heritage joined six months after me on the Heritage side. He is the same age and also an exceptional investor. My initial desk at Sequoia was on the same open floor plan as Doug Leone. You could have put an idiot in that situation and they would have found a way to at least make some good investments.

Jackson: You could take it the other way and say they threw you to the sharks. It was both.

Andrew: That is how we think about developing younger investors at Sequoia. What we lack in a structured feedback process, we more than make up for in a culture of investing in each other, especially in the next generation. Some people really like that environment—the freedom to sink or swim. Even if you end up swimming, you feel like you are sinking for a long time, struggling to stay on top of the water.

Jackson: I think you said somewhere that on your second day, WhatsApp was acquired.

Andrew: It was February 2014 when the WhatsApp-Facebook deal was announced. That was a four billion dollar gain for Sequoia.

Jackson: That’s the bar. Welcome to the company.

Andrew: It was amazing. An email went out saying to meet in the lobby at noon for a champagne toast. We were in the longtime Sequoia office at 3000 Sand Hill Road. The toast was literally five minutes long. Then everyone went back to their desks and kept working. That was an interesting moment. Jim Getz is a legend, and greatness is expected. That definitely still feels like the case.

Jackson: This is a lead-in to competition, which starts with your twin brother, Will. There was a lot of competition growing up. I’m interested in how this relates to what you said about Matt and Pat, and perhaps Sequoia’s culture broadly. There is a deep competitiveness that I sense you have. I don’t know how much you like to win, but you do a lot of it. Competitiveness can be channeled in great or unhealthy ways. I was curious how you relate to that aspect and to what extent it can be good or bad fuel. Beyond that, how can competitiveness sit alongside positive-sum outcomes? For example, you are competitive with Matt but also collaborative, or with Will, who does a similar job at a different firm.

Andrew: I try my best to exude California cool. For anyone who’s ever been in a trivia competition, a board game, or a chess match with me, I hate losing. My brother actually hates losing more than I do, or maybe we hate it equally. I’ve gotten to a point where I can at least pretend I can deal with it, whereas he definitely can’t. There was a period of my life when I felt insecure when people did well and I wasn’t. I felt jealous and the anxiety that brings. Matt is a good example of this, as is Dylan Field at Figma. I met some of these people early in my life, and they have gone on to do incredible things. First, you knew the entire time that they were incredible people. Second, they are the same level of good, exceptional, kind, and caring now as they were when we were nobodies. In the Valley, great people can win, and watching them win is rewarding in its own way. It is decidedly not zero-sum. When you make an amazing investment gain as a growth investor, more often than not, there’s a Series A investor making more. You have to accept that the job you’ve done is worthy, and it doesn’t have to be the most money or even the best multiple.

Jackson: You might be making more money, but their multiple is better.

Andrew: We have a job in the fund management business. If our funds are doing well, then we’re doing well. We’re not going to be perfect, and nobody is more into self-flagellation than Sequoia Capital. Our off-sites are a death march through the sins of the past. There’s good learning in that. The right frame of mind is to accept that you’re going to make mistakes and just try to get better. If you dwell on your mistakes as an investor, especially in venture where the world is moving so quickly and it’s always about the next rock turning over, you can end up totally stuck.

(19:07) Investing & Great Founders

Jackson: Let’s talk about investing. There are lots of ways to be a good investor, which probably draws so many smart people to it. Maybe there aren’t lots of ways to be a truly great investor, but there are lots of ways to be a good one. I’m curious how you would describe your style, how you invest, and why you think you’re good at it.

Andrew: It starts from a place of genuine curiosity and excitement about companies. At my heart, I’m a finance person. I love companies. We used to put the numbers of a company on the whiteboard on a Monday morning, and you had to guess which company it was. That was one of those trivia games that I loved dominating. The world is full of these wonderfully interesting businesses. Uncovering a new theme, a new founder, or a new business completes a corner of the broader mosaic of how the world actually works. That’s such a compelling feeling. I am consistently uncovering new things. The world is changing so quickly that cracks in that mosaic are constantly opening and being filled by something else. For me, it comes from an initial curiosity about business. By nature of being in Silicon Valley doing private company equity investing, you try to find the most interesting companies, which are often led by the best founders. When you’re doing your risk-reward analysis, it comes down to the best people mattering the most. One thing I’ve done really well is joining Sequoia young. I was 23 when I started. The first investment where my neck was on the line was Robinhood, which was about four years after I joined. I spent four years in the salt mines, observing. I was doing all the memos and models, crunching a lot of numbers. I would have opinions, but I wasn’t responsible for the investment, filling out the portfolio review software form, and giving the update.

Jackson: Yes.

Andrew: Robinhood was an instructive and amazing experience in a bunch of different ways. It’s important and lucky to get a banger out of the gate as an investor because your model is trained on what great looks like.

Jackson: A really positive feedback loop.

Andrew: It matters in terms of your learning and your reputation. I had that experience working with Vlad, and now I’m working with him again on Harmonic, his second company.

Jackson: The AI math company.

Andrew: I can identify these outlier people. They’re not all going to work, but starting with Vlad and then going to Vlad and Tuto for round two, I’ve picked the best set of founders. I would not trade my team competing against the Space Jam aliens for anybody. I have the best set there is. Once you get used to that, your bar gets raised so high. It keeps you focused on the main thing: identifying amazing people. Having a team like that working on your behalf is really helpful, too.

Jackson: Was there opposition to the Robinhood investment? Was it a fairly consensus type thing amongst your partners or peers, or were you pounding the table?

Andrew: It was ultimately consensus, but obviously contentious. It is a very divisive company and still is to this day. Charlie Munger went to his grave railing against Robinhood. Charlie Munger said in an interview that Sequoia is the best investment firm in the world, but he couldn’t believe they invested in Robinhood. He called the company evil. Imagine being an associate at Sequoia and your only company is being railed against on the record by Charlie Munger. That is not the most comfortable place to exist. If you look at the roller coaster, it continues to this day. It was one of the few formative investment experiences in my life. The initial entry into the investment was not super comfortable, and it didn’t stay comfortable for very long.

Jackson: You have this model of Vlad today, and let’s say that’s 99 percent knowledge or conviction of his greatness. Was that a critical part of your initial conviction, or did that come later? Was your conviction in something else about the business?

Andrew: I will often mention Vlad as shorthand for Vladimir and Baiju as co-founders. I do that with Figma, where Dylan is Dylan and Evan is his co-founder. You often shorthand to the person who is running it now, but so much of the DNA of these companies comes from the full set of co-founders and early employees. The degree to which the best founders change and grow over the course of their company’s life is extraordinary. Vlad today versus Vlad ten years ago is borderline unrecognizable. It was both the successes and failures of Robinhood that made him change so much. I think there is one common trait around a genuine growth mindset. It is the belief that I am capable of learning anything, and when the job requires me to go learn that thing, I will just go do it. In 2016, they did a good job hiring engineers out of Stanford and building incredibly compelling products across onboarding and infrastructure. They built the first self-clearing system built in America in thirty years. It took over a year to develop. It was one of those really hardcore finance infrastructure projects, and Vlad spearheaded a lot of that. Baiju provided a lot of the creative energy and some of the countercultural elements that made Robinhood so unique and special. The Vlad now, standing on stage and being a true spokesperson for an industry and a movement, is not the person he was then. He is so capable and mature now. He still recruits amazing engineers, but he can also stand in front of the ocean and speak to the whole world.

Jackson: I still wonder if you ultimately saw a seed, or if you were excited about Robinhood for some other reason?

Andrew: I forgot to answer the question you asked. One of the things I used to say back then was that you can’t find companies with 90th percentile metrics across every dimension, because the 90th percentile startup doesn’t go anywhere. You have to find companies where there is some outlier dimension. For Robinhood, the thing I saw was that they were just uncannily great at dominating the front end of that business. Their share of new account openings in the U.S., even when they were small and irrelevant, was north of sixty percent. They jumped out of the gate with a big waitlist. Reliably, even when the industry was slow and the equity markets were boring, they were still the vast majority of new account openings in the U.S. They did it without blasting the world with E-Trade advertisements. It was such a superior product. In 2014, back when you used to log into your desktop to do serious banking tasks, the fact that people would be holding big balances on their mobile phones was a little bit outlandish. They continuously kept people engaged. That was the thing that really stuck with me. Robinhood found a big profit area for incumbents, which was commissions, and they said this doesn’t need to exist. If you don’t have branches and you have genuinely low-cost operations, you can just remove commissions. You can make enough money through payment for order flow, stock lending, and other mechanisms to grow a business.

Jackson: Then you throw everybody into a crazy innovator’s dilemma.

Andrew: Exactly. People fail to realize that E-Trade was doing both payment for order flow and commissions. Robinhood was strictly better for people. Besides Fidelity, everybody else was doing both, and Robinhood just wiped that category out. The company was founded in 2013. In September 2019, Schwab, E-Trade, and Fidelity all wiped commissions to zero on the same day. It was like the George Bush “mission accomplished” banner. One of the initial impetuses of the company was to democratize finance for all. The first mission was to eliminate commissions, and within five years, that was no longer a thing that exists.

Jackson: Crazy.

Andrew: It was in some ways just the beginning.

Jackson: When it comes to seeing the Vlads of tomorrow, how have you thought about being able to see the seed that is going to grow into that kind of exceptionalism? If you meet somebody today whom you model at 10% or 20%, but there is something pulling you in—the approach to the product, the technical competence, or whatever—how do you recognize that potential? You have clearly been able to do it across many people, given your Space Jam comment.

Andrew: There are two ways I can develop conviction in a person. Sometimes you are lucky to have met somebody for months or years before an investment opportunity, and you watch them develop, execute, and run their company. Dylan from Figma is a good example. I met Dylan while riding shotgun to one of our early-stage partners for one of the early rounds of Figma. I saw what the company was then. Solo Cuervo, who was one of the early Facebook product designers and a highly relevant figure at Dropbox, was also in my ear about Dylan. I followed the company when it had $500,000 of revenue. Most users were on Windows machines, while Sketch was only on Macs. It was hard to see the potential then. That was the round that Mamoon from Kleiner did, which is absolutely one of his many iconic investments. I kept following the space. When it came time for the Series C, which we did, the company had grown from $500,000 to $4 million in revenue. On paper, it still felt like a very small company, but I could not have been more sure about Dylan.

Jackson: You also paid a pretty obscene price, if I remember correctly.

Andrew: We paid 400. That was viewed as ludicrous and unhinged. Obviously, Dylan has only continued to develop. The most recent board I’ve joined is Eleven Labs, the AI audio company. We invested in Eleven Labs two years ago. I didn’t join the board initially, but I watched Mati, the founder, building a company at the absolute most competitive bleeding edge of foundation models, creative tools, and AI agents. On paper, he was never going to win that race. Then you just watch him month to month and quarter to quarter grow, develop, and change. The company becomes this winning machine. When the question came up of whether I would do the Eleven Labs board or if I wanted Mati on my Space Jam team, the answer was absolutely 100%. That is a very comfortable way of developing conviction on somebody. When the rubber meets the road on whether to pay the price, the answer is an unequivocal yes in your gut. There is a smaller category of investments I’ve done that are like a shotgun wedding, where you wonder if this person is that good. My favorite example is Christina Cacioppo, who runs Vanta. It is now a very large and dominant security company in San Francisco. In January 2021, a couple of rounds happened in 16 seconds. Dylan introduced me to Christina. I checked our notes in SMS, our internal data science CRM product. Shaun McGuire had been tracking the company for a long time and said this was the company he would invest in if he had the chance. Dylan told me I had to do this investment, and Patrick Collison called to say the same. I met Christina and decided within about 14 seconds that I should do this investment. It was instant.

Jackson: Within 14 seconds on the phone with her?

Andrew: It was instant. We had Christina speak at our LP meeting two years ago. Her memory of our first meeting was that I was rushing her through her pitch deck. The reason I was rushing her was that I knew it was good. I wanted to get to the part where we figure out what the terms are. She never told me that privately, but she told all of our LPs. It was a moment where the sparks fly. It helps when the company is growing very fast and is profitable.

Jackson: Early-stage investors love to talk about people, while later-stage or growth investors love to talk about other types of momentum. How much of this focus on people is set against the backdrop that the thing is starting to rip? Maybe that is the given.

Andrew: If you divide the world into founders who are obviously amazing to you and numbers that are obviously amazing to you—both of which are matters of taste—you see that different investors weigh different metrics and dimensions. I am probably more comfortable with some metrics screaming red if enough other ones are screaming bright green. If you divide the world into amazing founders and amazing numbers and don’t deviate from that, you will maybe find three companies a year that meet your bar. Of those, one will be priced so ridiculously that you are not going to do it, and you do the other two. That is basically what I’ve done for the last 10 years.

Jackson: If you had to do your job without ever meeting a founder again, how would it affect your returns? And if you had to do your job without ever using Excel again, how do you think it would affect your returns?

Andrew: I will keep talking about Charlie Munger, despite his criticisms of me, because he is obviously the GOAT. There is a great back-and-forth between Warren Buffett and Charlie Munger where Buffett talks about doing a DCF on a company. Munger interrupts him and says, “You’ve never done a DCF.” Buffett responds that if you have to actually do the math, it is too close. You do a quick DCF in your head, and if the company is good enough, the math takes care of itself. If you have to resort to doing data analysis, you are in trouble. I think that is probably true. There is the occasional corner case where you have to do some sophisticated analysis around cohorts or usage to get to the ground truth of a company. But more often than not, the output metrics take care of themselves.

Jackson: Don’t get cute.

Andrew: Exactly. Even if there are situations where you have a company growing really fast and the issue is the churn, you can get to that pretty quickly. The no-founder thing would be impossible. I wouldn’t even know what to do; I would just buy an index.

Jackson: Maybe that’s the fundamental difference between the work you do and other parts of finance, private equity, or even public equities.

(37:53) Andrew’s Style, Pat Grady, and Continuous Learning

I found this hilarious thing: Green Oaks has quite literally trademarked “jaw-dropping customer experience” and “breaking trade-offs.” I’m curious if there’s anything that you would trademark in terms of the style or the things you’re looking for. Maybe a lighter version of it is just what’s on the Andrew Reed Sequoia vision board.

Andrew: I don’t think I’m innovating on any dimension. What’s interesting about working with someone like Pat—and let’s talk about Pat for a minute because he is definitely the most influential person on my career—is that he and I disagree about investments so often. Pat and I co-led the growth business at Sequoia together for a number of years. I’ve been his associate and his partner. The specific thing that often happens is Pat brings in a company, and my taste element just isn’t clicking for some reason. Pat hates it when he feels like people, because of his track record, aren’t telling him the truth. I always try to tell Pat my absolute truth on the companies he brings in, which sometimes is, “Dawg, what are you doing?” I don’t have anything I would trademark in terms of frameworks. Otherwise, I feel like you could freeze Pat’s brain and chip off a little corner, and it’s got some framework that he hasn’t even told you about unless you ask him. The whole thing is this Rube Goldberg machine of frameworks and processes. If you are 90th percentile framework-heavy, you’re not going to be a great investor. If you are 100th percentile framework-heavy, you can actually be extraordinarily creative, because a lot of people are just doing shorthand on things and miss incredibly obvious opportunities. Probably my two favorite examples: one is our investment in Open Evidence, which is the leading AI app for healthcare professionals. This was a company that had no revenue. It was selling a free AI service only for licensed medical professionals. It looked a lot like ChatGPT, but it was up to date with the most current medical literature. The founder had a really good reputation. He started a company called Kensho, which he had sold for $700 million. But he was living in Malibu, and the team was working out of his house. It had 10 people and no revenue. A few of us have doctors as relatives, and none of them had ever heard of this thing. Pat thought we should do this investment. I didn’t even know where to begin criticizing this idea. I started with no revenue just to get the conversation going. Point by point, Pat explained exactly what he saw. They just raised at a $12 billion valuation, and it is backed by incredible people.

Jackson: In this systematic type of framework.

Andrew: He was systematically piecing apart the argument. We got to the point where, at the end of the process, we were all really enthusiastic about investing. Pat’s got a strange brain. He really wanted to win this investment. We issued the term sheet, and Pat was working late at night. He’s the kind of guy who won’t ask the finance team to do a term sheet late at night if he can just do it himself on his computer. He really wanted to get it signed because he wanted to get it over with and move on. Pat logged into the DocuSign portal and created the DocuSign for this term sheet, which he had never done before. He sent it to the founder, they went back and forth, and the founder looped in the lawyers. Pat was waiting for this guy to sign the term sheet. Then the founder invited him to a company off-site in Bora Bora. Pat said, “I’ll be there tomorrow.” He went with the goal that he couldn’t leave the office to go to Bora Bora and come back without that term sheet signed. He spent the whole two-day off-site talking to 11 employees at this company, really trying to find the right moment to get this thing signed. Then he realized that when you are the one who puts in the DocuSign, you don’t actually get the email back that says the guy signed it. The guy had signed it immediately. Pat spent 10 days of his life so stressed out, literally flying to Bora Bora, stressed about getting this term sheet signed.

Jackson: He’s like, “We’re already working.”

Andrew: Anyway, that’s Pat.

Jackson: This business is one of continually finding exceptions. Yet Sequoia, and seemingly you, have done a quite a good job of doing it over and over again. If Pat is on this 100% framework, a highly structured way of doing things, do you feel like you’re continually pulling rabbits out of hats? Clearly, you’ve developed an instinct on the people side. What is this tension between consistency and exceptions?

Andrew: One of the ways you learn how to do this job—maybe the only way—is to watch the people you work with do the job and figure out your own way from there. Jim Goetz used to always talk about people who can re-pot themselves as investors. Jim helped put together the seed of Palo Alto Networks and was one of the leading early-stage cybersecurity investors. Then he turns around and does a growthy round in WhatsApp. Mike Moritz did Yahoo and Google, then PayPal, lost money on Webvan, turned around into Instacart, and did Stripe. Doug Leone, the most famous enterprise investor of his generation, at the tail end of his career, backed the Nubank seed and Series A. That was the biggest return of his career and one of the biggest ever in venture. There is a track record of people who just don’t get bogged down by being a “SaaS investor” or a “Series B investor.” These are people who are consistently willing to reinvent themselves and take risks on their reputation or their understanding. That’s one of the key lessons from Sequoia: you just can’t keep doing things the same way. That applies at the system level—what businesses we are in and how we set up our teams—and at the individual level. We don’t have swim lanes in the same way some people do. Imagine every investor does two or three deals a year. Imagine entering 2021 or 2022, and you have two people on AI out of your 10-person investment team. That means you have a maximum of six AI investments. That would be crazy. You want to have a team of curious people.

Jackson: I’m sure you’ll back down from the comparison, but it’s how you were describing Vlad: this default “I can figure it out” mentality.

Andrew: To me, if hedge funds can have TMT analysts, why can’t we have TMT analysts? I can be a TMT analyst. Obviously, some people bring really specific domain expertise. I was lucky enough to wingman Shaun Maguire on our SpaceX investment. Shaun has big ideas, and he’s very vocal about sharing them. When we went to SpaceX, Shaun was a quantum physicist and worked with rocket companies in his past life. We’re walking through this factory floor where they’re making spaceships, and he notices one of the things that moves the satellite in space. They’re using some gas that you wouldn’t have assumed they were going to use because of the label on the tank. He asked the guy a question, and the guy explains why they use this gas and not that gas. I didn’t even realize that was the satellite yet. I wasn’t even in the same zip code. There is this dimension where you want people who have real domain expertise and can really upload your thinking. That’s how I think you get really exceptional investments. But all of us are always trying to learn and try new things.

(47:31) Doubling Down and Not Flinching

Jackson: I think there is an underrated lesson among great investors: they are not only right, but they are right with size and with extreme conviction. What is the difference for you between a first involvement in a company versus doubling down?

Andrew: Sequoia has invested over a billion dollars at cost into three companies now. In general, the way we’ve gotten there is starting very small and doubling and tripling down. Stripe is a great example. We first invested in 2010, and the first investment was about a million dollars. The biggest source of unfair advantage in evaluating an investment opportunity is being on the inside. This means being on the board, seeing the pipeline, seeing how things are developing, and watching the founder execute.

Jackson: All the people stuff you were talking about with Vlad, you’re not going to get that lens from the outside.

Andrew: It’s actually not universal. I think the hardest round is the next round after you invest. It’s actually quite straightforward to invest seven years later when you have extraordinary conviction, and the company is marked up eight times from when you invested, but they’ve grown the business 30-fold. The hardest one is when you invest and, six months later, there’s a term sheet in at five times the price you just invested at.

Jackson: With very little additional data.

Andrew: The data is limited. In fact, you just joined your first two board meetings and see the things you didn’t realize were wrong. This person is leaving the company, and other people are really excited to invest, in part because Sequoia invested and in part because the company is obviously interesting. That’s the investment that, time and time again, we have screwed up. It’s just really, really hard. The first explanation is that you’re price anchoring, but it’s not just that. Across all these different dimensions, there is the validation of getting somebody else who’s going to pay a big price for this company.

Jackson: Now you’re getting a markup.

Andrew: But that’s the one. If I could just solve that problem on my investments, I would snap my fingers. I try so hard to change my process and change how I think about things. Ignore the board deck; study the board.

Jackson: You’re manipulating your own psychology.

Andrew: Yes, and so far to little effect. But I’m only 35, so I can figure it out.

Jackson: You wrote some lessons from your first 10 years at Sequoia, and one of them was “don’t flinch.” Can you talk more about what you mean by that?

Andrew: Opportunities that you’re really excited about reveal themselves infrequently and never at opportune times. For me, my proudest moment as an investor was seeing Dylan at the New York Stock Exchange. That was the coolest thing ever. I was just so happy for everyone at Figma, given the acquisition, the antitrust, and the whole thing. Seeing them there was my proudest moment as an investor. My second proudest was this investment we did in Robinhood in 2020, during the first week of COVID. I grew up around New York City and graduated high school in 2008. When I was entering the adult world, the financial crisis in New York City was the main event. I remember I read The Big Short right when it came out and wondered how I was going to react to a crisis in finance. I pictured myself on Park Avenue, wheeling and dealing, going to a boardroom, and making a deal happen when things were blowing up. That’s how you envision it in your head. I really wanted to be a great investor and imagined myself in that moment so many times. What it actually looked like was that I had just bought a house with a pool outside, but there was no furniture in the house. We were locked down because of COVID. I had an eighth of my wardrobe there, and I was doing circles around my pool talking to Vlad and Baiju about this investment when the market was gapping down five points every single day. Robinhood was chaos. This was back when you could double your money on Boeing in 16 minutes. We did a $200 million check that first week of COVID. The app was down for a whole day. When I say “don’t flinch,” I felt so proud of not being scared of that moment, in part because I had prepared myself for it for so long. What would the guy you want to be do in this moment? Similarly, when dealing with legal battles that you end up entrenched in, you can’t let yourself down. All of us like to imagine how we’ll react in these really high-stress, high-stakes moments. “Don’t flinch” to me just means doing the thing you know you should do.

Jackson: Your conviction and success rise to the occasion with stakes. The relationship between conviction and stakes for you increases. I don’t think that’s necessarily obviously true for everyone. Maybe it is true for all good investors, but is there a psychological or internal mechanical way you relate to meeting the stakes with a supreme amount of conviction? How do you get to the point where you’re not going to flinch in those types of moments?

Andrew: Having your first investment be Robinhood has paid huge dividends for me. What could possibly be more stressful than the GameStop week? That was one of seven really challenging weeks at that company. Once that’s the norm, your heart rate doesn’t move that much through the fire. People who came up through crypto have a very unique psychology for the markets because they faced seventeen drawdowns in the same mass.

Jackson: I was born in the darkness.

Andrew: That’s a real thing. I think about the Figma M&A unwinding and then the subsequent success of the IPO.

Jackson: What was that period of time? What was the gap between when the deal was signed—the $20 billion Visa offer—and then the IPO from Adobe?

Andrew: It was from September to December. Fourteen months.

Jackson: Some of those fourteen months were—

Andrew: I took over the board of Klarna in a widely publicized, challenging situation. I was the perfect person to step into that to help people sort through their things and get the company to the IPO. If I could be known for that—the person who’s very uncomfortable in deeply uncomfortable situations—that would be a dream. I have to keep proving myself. The way you do that is you find yourself in them, which is sometimes something you wouldn’t wish upon anybody. It is helpful to imagine how you would want to react to these sorts of things. I can think of plenty of situations where I wish I were more aggressive. One example where I flinched was when I brought in Vlad while the Robinhood stock was trading at $7 a share. I haven’t given up to the partnership, but I thought it seemed like a good company, and maybe we should invest. I just got busy and didn’t follow through with it. I’m far from perfect, but you brought up boards.

(56:09) Empathy on Boards, Learning the Real Business, “Expensive” Prices, and Selling

Jackson: The common trope is that a board’s job is to hire or fire the CEO. You talked about the role of a board member being a shock absorber, particularly in these moments of chaos. You said startups are emotional. One of the benefits of having a good advisor or board member is that we genuinely care about you, but we can also be objective when it’s required. It’s like asking your brother for relationship advice.

Jackson: How do you bring humanity, empathy, and vulnerability to that role in a way that is actually not a BS thing, and in a way that actually helps Sequoia make money? How do those two things fit together?

Andrew: Life is hard. It would be better for the psyche of founders if their ego wasn’t wrapped up in their business so much. But that is a lot to ask for somebody who is in the eye of the storm, building a company. With so much weight, responsibility, and so many people counting on you, people can experience their ego death later in life. While they’re running the company, you have to recognize that they are going to wear every up and down way harder than you can imagine. I was talking to Ravi Gupta, who is somebody I really admire. Ravi described Instacart to me. Whenever an investor would tell him, “Have you thought about this idea?” he would think, “I think about this company twenty hours ago.” There is nothing you’ve thought about that he hasn’t thought about. That doesn’t mean don’t make suggestions. It just means that instead of “Have you thought about this thing,” it should be, “Surely you’ve thought about this way more than I have, but here is what I see.” Sometimes people just don’t want to talk about it. The fact that you have a meeting scheduled doesn’t mean now is the right time to talk about an important topic. Sometimes it’s okay to go to a meeting and just not talk about that thing. Meet founders as people. This is a deeply personal relationship I have with the people I get to work with. That applies to my partners and the founders I work with. When I’m having a hard time, they hear about it too. I’m often looping in founders to help me win investments or think through investments. Revealing that I don’t have all the answers and that I really want their perspective is helpful for them because they can come back and feel the same way.

Jackson: When you were talking to the TBPN guys, you said the first thing you do when you join a board is learn what business you’re actually in. Can you talk a little bit about that?

Andrew: That’s a Doug line. You are being sold when you’re investing in a company. Even when companies are revealing the metrics they don’t like, they’re often doing it in the same way you’ll performatively open up to a new friend. Allow me to tell you about my insecurities. If you’re telling me so quickly, that’s not the real issue. Knowing what business you’re in means understanding how bottlenecks reveal themselves in business. We’re systematically trying to remove the next set of bottlenecks to enable the next set of growth. You do that time and time again until you’re wildly successful. If you go to the Microsoft board, I’m guessing they’re thinking about the bottlenecks to their growth. You think you have a sense of the bottlenecks, but if a company is growing fast enough, it’ll be a different set of things in two months anyway. Then there is the interpersonal side. How does this person recruit? You’ve never been on search calls with them or seen them try to close a candidate. How does this person manage a team? You learn so much about this business that you now own a stake in, that you can’t possibly learn when you’re on the outside.

Jackson: Yes. You also have the psychology of being a part-owner of the business, evaluating all this versus being an evaluator.

Andrew: This is why that first investment thereafter is often so hard. PSA: I love all of you, but that first board meeting is very rarely, “Holy, we’re going to make so much money.” More often than not, even for the best companies, you’re just getting the lowlights.

Andrew: There is a non-uncommon thing where a company will have gone from 4 to 20 million in revenue. I think we made a great investment, but it went from 4 to 20 on a plan for 33. Why did we miss our plan so badly? On the outside, all you see is the 4 to 20. That is the perfect example. 4 to 20 is pretty damn good. Who cares what the 26-year-old finance lead suggested they might do?

Andrew: But when you’re listening to the 26-year-old finance lead explain the point—

Jackson: —and they’re not narrativizing it in a positive way.

Jackson: Is there ever a time when price doesn’t really matter?

Andrew: Price always matters.

Jackson: To go back to Figma as an example, you paid an obscene price. Maybe that’s just the nature of this business, and there are always going to be people who think the price is obscene. You are certainly at the growth stage too, and someone with your orientation loves the art of business building. There are early-stage people who are just like, “It’s all vibes, man. Smash the founder bet. It doesn’t matter. 100 million pre. Let’s rock.” You clearly have less of that. But still, there is a time when you’re going to say, “I wouldn’t pay an infinite price, but I’m going to pay a price an order of magnitude beyond what makes sense.” What’s happening there?

Andrew: Allow me to leak some alpha. This is on the flip side. I have the theory that no one actually listens to podcasts, so no one will ever hear this. I did really well in that cloud SaaS product growth wave of companies. One of the reasons why is that I just never thought about companies on an ARR multiple basis. For companies growing really fast, you obviously grow out of that very quickly. Let’s take 4 million in revenue. If you got there going quarterly 1, 2, 3, 4, that is very different than 1, 1.5, 2.7, 4. It’s the net new ARR. What are you actually doing in the market this quarter that is the true size of your business? I always thought a winning SaaS company should trade between 100 times to 200 times quarterly net new ARR. If you’re at 4 million of ARR but the last quarter was 2 to 4, you added 2. 2 times 200 is 400. That’s my line. If you’re doing $100 million net new ARR a quarter, guess what? I’ll pay 20. It is a heuristic that I think actually works at basically every part of the chain. It’s not perfect, but it’s a much better way of doing multiples than looking at an ARR multiple. Figma is 100 times ARR, but it also is four times the two-year-out ARR. What’s the right multiple? It’s obviously the latter one. Often, I’ll be with friends from other investment firms, and I’ll start quoting my quarterly net multiple math, and they’re like, “What are you talking about?”

Jackson: You can’t do that.

Andrew: It doesn’t make any sense. Trust me, if you look at your investments and go back and look at what price you actually paid, this is the market. The market doesn’t do ARR multiples anymore. You’re just not thinking about it.

Jackson: I suspect there’s a lot of that going on. There is a set of rules that I kind of have to follow, and you’re not seeing the water.

Andrew: I don’t think this is novel or insightful anymore. With the Vanta investment, we paid 480 million for a Series A. It had gone from 2 to 10 million and was profitable. The last quarter was over 3.5 million net new. 480 is a good price.

Jackson: On the note of conviction, how do you know when to sell?

Andrew: Mathematically, if you look at the performance of founder-led companies and you own the whole basket, the answer is you don’t sell anything. Obviously, we don’t benefit from indexing, and the biggest companies kind of run away. At Sequoia, we’ve set up our entire business around the idea that we want to be able to hold shares in the best companies forever. The best companies, especially run by the best founders, actually get better over time. Sequoia has learned some extraordinarily painful lessons on distributing stock or selling stock in companies prematurely, even if it’s an amazing gain. I think we owned ten points of Google at the IPO.

Jackson: The Apple one is insane.

Andrew: Selling Apple for a 40x on $150,000—don’t do that math. We’re set up to never have to sell or distribute. Obviously, you’re constantly trying to rerun the math. If you get a 2021 moment where stuff is unhinged, we need to be stewards of capital. We are in the fund management business, and we really think about that. Our default at an IPO is that we aren’t even thinking about the lockup. Often, founders are thinking about the lockup, and you’re not. They call you to ask what’s going on, and you realize you hadn’t even tracked it.

(1:07:18) Managing Ego and Becoming a Leader

Jackson: You have a line where you said, “Learning how to be neutral to happy when other people get ridiculously rich is an important trait in investing.” I’m curious how you’ve managed your psychology on the inverse of your own success. You were quite successful with the first Robinhood investment, and at this stage in your career, you’ve had a tremendous amount of success. Hopefully, a lot of that is feeding the right inputs for continuing to make good decisions, but I suspect you don’t want to get high on your own supply.

Andrew: For sure not. This job is expressly humbling because companies so often undershoot their targets. Even the best companies, if you’re setting a good plan, you’re making it most of the time but missing it some. If you’re on 15 boards, companies are always missing numbers, and shit’s hitting the fan constantly. You’re just making mistakes left and right. You didn’t see an investment, and it turned out to be great. You’re late to the AI thing, and your partners are doing better than you are. You’re just constantly getting harsh feedback. 2025 was “no cope 2025.” 2026 is “no cope 2026.” For the rest of my career, you just have to face the criticism head-on and really try to understand it. You can do that without taking it personally. People take potshots at Sequoia all the time because of our history and legacy. People try to position us, so you’re constantly hearing things. There was a point in my career when someone would go after me on Twitter or make fun of us, and it would rile me up. Then I realized that if someone is criticizing me personally about my work, I can live with that. Why would I care if someone is criticizing my employer? In the same way that a founder’s egos get so tied up in their business, it’s the same with anybody who really cares about what they’re doing.

Andrew: You do need a healthy dose of self-confidence in investing because you need to be doing investing.

Jackson: Also, the downside is capped, and the upside is not.

Andrew: The biggest issue people get into is that if you look at a lot of the best venture investments ever, it’s often people earlier in their investing careers, but it’s very rarely their first deal. The reason is that people get frozen on their first investment. If you’re accumulating a portfolio of one, the bar is just so high that you can get stuck. If you have a portfolio of 20, it’s often hard to be the first to something or really deeply understand something nobody else can. But if you’ve got four or five companies and one of them is pretty good, you’re playing free. You see things really clearly. If this thing blows up spectacularly, it’s not going to kill your career. That’s a really beautiful phase in people’s careers. If you look at any partnership, you don’t want everybody having been there forever. You don’t want all novices, but you also don’t want people who are all building a portfolio at the same time. You want people at different staggered development gaps. I think about that sometimes.

Jackson: You said nothing you do before joining a VC firm prepares you for how multifaceted long-term success is. Are there any facets that are particularly top of mind for improvement as you are in the early phase of decade two?

Andrew: By my nature, and in part because Pat cares so much about how the venture business is run—structure, team strategy, processes, and pipeline—my brain naturally gravitates outside the building toward companies. If your brain is out there, the world is just changing faster and faster. For me, the main thing is: how do I stay freaking relevant in every facet of the job? How can I identify the right founders? How can I understand what a great company looks like today? How do you evaluate the market position, long-term moats, and metrics of AI companies? They actually look quite different than the last generation of software companies. In the data center world, I was googling what a megawatt was a year and a half ago. You have to uplevel yourself tremendously. I’m at a different stage in my life than I was when I was 25. I had an amazing conversation with Kristen Faulkner, the 2024 Paris Olympics gold medalist in the cycling road race. She was describing what brings her joy at this stage of her life. She had ascended to the mountaintop and said, “I know what it feels like. Getting to watch my younger teammates feel that feeling for the first time is way better than feeling that feeling again.” That one comment is going to stick with me for the rest of my career. I know what it feels like to make a really cool investment, feel that winning feeling, do an IPO, and sell a company. But getting to watch somebody else feel that for the first time and put themselves out there—there’s just so much joy in that. I’m not by nature a process person who is going to grind people and make them do great work. I do want to get better at helping people find that moment. When you see it, it’s just the coolest freaking thing.

(1:14:08) Craft as a Commercial Input, Knowing vs. Feeling, Preparing for Big Days, Becoming a Great Closer

Jackson: It’s a great answer. There is obviously a gut taste instinct part of this, even in the way you evaluate the quantitative side of things. I found where you were talking about your focus on quality and craftsmanship in companies. When I evaluate a company, I talk to users, try the product, look at job postings, API docs, and support forums, not just the slide deck and financials. Great companies have a consistency of design and experience that permeates the entire organization and every interaction with their customers, users, prospects, or developers. Attention to detail is important to me. How does that craft and attention to detail become a commercial input?

Andrew: I saw you last night at the Stripe Press event that Tammy Winter put on around the Stewart Brand book. Tammy’s work on Stripe Press is the perfect example of how an amazing culture around quality and winning seeps deep into the organization at all its edges. If you examine amazing companies at every angle, you can see that the same principle applies. It is evident in the big Figma conference, Config, which is like Woodstock for designers. Every little piece of it is so good. Good companies just do things so well. As it relates to products themselves, we are in this Claude code moment where people believe interfaces don’t matter, and everyone is going to be a creator. A lot of that is true. However, in a world of infinite software, design, and craftsmanship will be the ultimate arbitrator of success. It has never been more important to have taste, an eye on when to stop, and the ability to cull things. Craft in software is not just UI; it is how fast the thing runs. Design in the full sense—not just product design, but the design of an organization and everything it does—has never been more important. That is probably shockingly iconoclastic in early 2026. I suspect this time next year it will feel very different.

Jackson: We are probably soon going to have computers that can do the quantitative stuff better than you can, if not already. I am curious how much of your conviction—and I don’t think this is a perfect comparison—is about knowing versus feeling. This gets into the taste thing, too.

Andrew: It is the gut instinct that you lean on. I have not, and I will not use an LLM to write. Historically, I have also not used our younger teammates to write.

Jackson: That was the first LLM.

Andrew: We have one of our best young guys named Isaiah who cranks work like you have never seen. He often works with Ravi. We often say that Ravi uses AI in his work, and AI stands for Actually Isaiah. Ravi has been using AI longer than anybody else. Part of it is a gut check. When I am working on an investment, and we do long-form memos, there are no sections. You start from a blank sheet of paper, write out your thesis, and fill in the supporting evidence. When I really want to do an investment, I will sit down and stay up through the night. At 6:00 a.m., it is a PDF and sent. When I am really excited, I sit down and start writing. Sometimes I lose the buzz, and I do not even try to fight it. If I hit that feeling, I realize this might be a good investment, but it isn’t what my best investments have felt like.

Jackson: My friend Chris Paik says the same. He says he has to be willing to do the work. You alluded to when you first came into the firm and were starting to get your feet under you. People come in and can pick somebody to work with, and it is all of these legends or 27-year-old Andrew.

Andrew: Yeah.

Jackson: You talked about how you started tweeting and a handful of other things. I am curious to what extent you are sending a bat signal now and how much you care about that. You do not do a lot of podcasts. How do you think about the legibility part of it?

Andrew: When I started tweeting, it felt more countercultural at Sequoia Capital than you could possibly have imagined. I was ducking for cover when I rolled out of the office if one of my tweets had gotten people talking. Back then, I was perhaps the first good poster among venture capitalists. In that 2017 era, who you followed mattered a ton. You could have real alpha in your feed. If you followed the right 400 people, you could know everything actually going on with none of the noise. I think almost all content produced by investors is marketing, whether they know it or not. Whether you call it legibility or something else, it is a marketing document. One effect of LLMs is that you can produce extremely in-depth content en masse about anything you set your mind to. These market maps are useful and good. But the thing you are trying to make legible is that you actually get it somehow. Connecting dots through humor is one of the easiest ways to make legible your understanding of a subject area.

Jackson: There is also a person on the other side of the screen.

Andrew: Exactly. One of the things Ava always says is that my tweets are clearly funny to me. My subtweets are definitely not always funny to everybody, but I am always chuckling at my own stuff.

Jackson: He’s having fun.

Andrew: I am always chuckling at my own stuff. It is great. If you do not think your posts are good, I can guarantee you nobody else does.

Jackson: More of us would probably do well to remember that. You have a thing about big days. There is an old quote called the Stonecutter’s Credo that describes hammering at a rock a hundred times without making a crack. At the 101st blow, it will split in two. I know it was not that blow that did it, but the hundred that had gone before. I try to remember that in our work. You never know which days will be the biggest of your career, but if you stay focused and keep hammering, those days will happen. I think this ties into not flinching. Can you give an example of a day like that, or does that philosophy hold up? Is it a string of years and a handful of big days?

Andrew: I was just thinking about this morning. We have a young guy on our team named James Flynn who is similar to Mike Martin. James Flynn is going to be well-known in the Valley in ten years. He is still very young and developing. His tweets kind of suck, but besides that, James is amazing. James brought me to a company meeting sixteen months ago. It showed up as one of five back-to-backs starting at 8:00 in the morning. He put it before my 8:00 meeting on Zoom. It was a Zoom call at 7:15.

Jackson: Nice.

Andrew: James had been at Sequoia for less than a year, and the last thing I ever wanted to do was this meeting. I remember the feeling of seeing it hit my calendar the night before and realizing I had to get up earlier and miss my workout. I was ready to be annoyed.

Jackson: Yes.

Andrew: This is a crypto company that we invest in and haven’t announced yet. It’s probably one of the investments I’m most excited about. Two minutes into the meeting, I was like, “James, I love you so much, man. This is so good.” To me, that’s a perfect example. Some days you just show up, and if you’re not ready for it, that’s a problem. It can be a 7:15 meeting that a young guy six months into his career just brought you to, that you easily could have said no to. Similarly, Doug brought in Aruba Networks and something else. Two of Doug’s big billion-dollar gain IPOs happened on the same Monday partner meeting. He did memos for both of them and had them present back-to-back. To me, that’s the guts of a great investor. You would love it if, once a quarter, some amazing investment opportunity presented itself, but it’s more likely you’re deep in the weeds on one, and the next one’s there.

Jackson: Days before Christmas, whatever, right?

Andrew: Yeah. Would I be capable of having the work ethic to really evaluate two things in parallel and win those investments in parallel, knowing how single-threaded I get? I don’t know. But that’s why it’s Doug Leone.

Jackson: There’s a view that says there are the parts of investing: sourcing, picking, winning, and building companies. Clearly, some of your investments have shown this is not always the case, but there’s a view that says a lot of the time in growth, and maybe especially at a firm like Sequoia, it’s actually about winning when the rubber meets the road. Sometimes everybody knows the companies. To the extent that is sometimes true, what makes you a great closer?

Andrew: I used to have “references available upon request” on my Twitter bio. Founders listen to other founders, which is why winning your first one is really hard. Once you’ve got it, they talk to other people to see what they say. Obviously, you have to meet people where they are. You have to show them that you believe in them and the company. Enthusiasm, understanding, and deep belief are really important in the moment. I heard this amazing talk from Winston Weinberg, who runs Harvey, which is one of Pat’s investments. Winston was talking about how it’s really important to founders that they know you will go to war for them. Whatever fight gets brought to them, you’re there for it. To me, that was the best piece of feedback I could have heard. I think I needed to hear that. He was just giving a talk and I was in the audience listening. I’ve always communicated to founders that I really believe in them, but I think I’d be even better if I communicate that no matter what happens, I’m here for it. Maybe that probably comes out in references if you talk to Vlad or Dylan about the low moments. That is who I want to be. I wanted to be the person who is side-by-side, shoulder-to-shoulder.

Jackson: You’ll rise to the occasion. What do you think is the most common praise and the most common criticism that founders who are referenced on you would say?

Andrew: One time, I heard that Matti from ElevenLabs told another founder that I was low EQ. What the hell, man, I love you. I immediately responded back to him like, “Dude, what?” I have this cabal of the best founders—like-minded, really great people like Kevin Kelly, Matt Huang, Ravi, and Pat. I feel like I’ve surrounded myself with these exceptional people. That’s probably the thing that people are most excited about in working with me. I don’t think it’s a personality thing per se. I show up, I’ve read the board deck, and I’m excited to engage. I love business, debating things, and picking up the phone on Friday nights. But I think more of it is just the association with these other people, which is amazing. As for criticism, there are ways in which I’m a subpar venture capitalist. If I’m interviewing a VP of Product for your company, you might as well have anybody else interview that person. I’ve proved myself to be a very subpar interviewer of specific roles. On the metrics thing, I’ve definitely gotten into ruts where I’ve been wrong. There was a period of my career where I was convinced gross dollar retention didn’t matter, and it was only net dollar retention. 2022 blew that up. I get stuck on things like that. But I do think people would say I’m loyal.

Jackson: And every once in a while, low EQ.

Andrew: Every once in a while, I say things in a dumb way.

(1:28:39) Sequoia Capital

Jackson: I have some questions about Sequoia’s extreme performance culture. There’s the Doug thing about the ten tenets, and number one is performance. I’m curious how an extremely meritocratic environment is both freeing and to what extent you had to be forged through that.

Andrew: If you buy in, it’s the best possible cultural attribute you could want in an employer. Performance is key. In the investment business, where returns are lagging, there is an element of subjectivity to it. But if you know, you know. With our team right now, I’ll hear about a company I’m excited about and find that David Cahn or Sonya Huang had emailed them yesterday. It’s happened to me 14 times in the last year. I find myself a step behind my partners on the companies I’m really excited about, and that is so good. That is exactly how you want it to feel.

Jackson: Yes.

Andrew: It is the same with Pat or Alfred. They will see something that I do not see at all. Your instinct should not be to argue; it should be to ask them to explain and just tell you. I think for people like Isaiah, James, or Anas, who is one of our young guys in London, it means that if you put your neck out there, people really want you to win and succeed. The only downside is that my golf game is probably never going to get any good.

Jackson: You mentioned criticism earlier. I am curious if you are willing to share the harshest or most effective criticism you have received.

Andrew: I had a breakfast meeting with Mike Moritz downstairs in this office. I think Mike is the best venture capitalist of all time and has the best way with words of anyone in business. He has looked after me my whole career and has done right by me time and time again during my low moments. I won’t share the details of the conversation, but it happened at an important time in my career when I was heading down the wrong track. He managed to give me feedback that was deeply cutting but also expressed extreme belief in what I could achieve. My guess is that at this point, he doesn’t remember this moment at all. It was just another instance of giving feedback. But I remember that I was heading down a path where I was going to be grumpy, disagreeable, and icy. I was in a rut and did not want to deal with anything except my own investments and keeping to myself. He totally moved me to the other side and changed my life.

Jackson: This is a quote from one of your old job postings: “Sequoia trees can live thousands of years. Not only that, their wood production and growth increase as they age. They resist the deceleration and eventual stagnation that befalls most living things.” I think there is a broad sense among many investors that what they do might not actually matter due to determinism—the idea that these companies would be funded anyway. I sense that you and Sequoia believe this institution is quite important. Why does Sequoia matter?

Andrew: First, I would say that job posting proves that even before LLMs, I could write like an LLM. It is uncomfortable hearing that sentence said out loud. Sequoia does matter. It is an iconic institution in the Valley with an amazing history. In Silicon Valley, history really matters. From Shockley Semiconductor all the way through today, we are in an era that will probably be in history books. We are standing on the shoulders of exceptional investors like Don Valentine, Mike Moritz, Doug Leone, Jim Goetz, and Roelof Botha, who have given so much of their lives to this place. If we are the ones who let it fall back into being just another VC, we have failed. History is littered with examples of that. Hummer Winblad was the hottest VC in the world in the 90s, and now no one has even heard of them. We are not immune to that. Carrying that history brings a deep amount of pride, but it also invites criticism. If you do not perform well in terms of making investments and discussing the future, you run the risk of being a fading star, which is the last thing any entrepreneur wants to hitch their wagon to. We are not going to let that happen. We know the only way to ensure our continued existence is to take risks, break things, and face the embarrassment caused by mistakes while capturing the opportunities presented to us. I am very proud of how our teams operate.

Jackson: Sequoia brings in a lot of young people and trains them through apprenticeship. One thing that comes up is a deep-rooted need to prove something. There are classic tropes, like someone’s father dying when they were young or going through something incredibly hard. I am curious about the different ways that need to prove something can show up—the different flavors of that.

Andrew: There was a Sequoia heritage event in Montana. I was there with Dylan Field when the Adobe deal was going down. Doug Leone was on a panel with Roelof Botha, Michael Moritz, and Neil Shen. Someone asked how we hire young people. Doug said what he always says: we look for people who are high-achieving on the surface but have something deeply complicated underneath. He said, “We have got this one guy who has a twin brother. You think he is normal, but deep down, he is more screwed up and competitive and cannot lose.” At the time, I was the only twin on the team, so everyone knew he was talking about me. Doug is an amazing evaluator of talent. We say we look for people who are hyper-competitive with a heart of gold; that is the entire rubric for our growth team. Hyper-competitiveness comes from somewhere, and it does not always reveal itself instantly. You have to really find it in people. There are plenty of 4.0 students at Harvard who do not have that “dog” in them. There are plenty of people who have achieved a lot in the past but will not necessarily succeed in the future. I grew up in a perfectly normal family, in a nice house and neighborhood. I played sports, went to a good school, had a great GPA, and won academic and athletic awards. None of that answered Doug’s question of why he should hire me. Sometimes people say they will not hire someone who went to Phillips Exeter, but many great investors went there. That is not the problem.

Jackson: You mentioned you joined at 23. You were one of, if not the youngest Sequoia partner ever. How have you managed being an early star?

Andrew: The four years in the salt mines helped. It did not feel like I was shot out of a cannon.

Jackson: But you do Robinhood and get that promotion.

Andrew: I did Robinhood, which felt like a good investment, then a bad investment, then a good investment. Then I did a few others, like Loom and Figma. At Sequoia, you never feel like a star. Doug did the Wiz investment when he was 64 years old in an Israeli company a zillion miles away from home when he should have been on the beach or playing golf. He mogs us with this multi-billion dollar gain right before he retires. That’s outrageous.

Jackson: Yeah.

Andrew: The bar can go higher. I’m not even eclipsing the bar; I’m hoping to even see the bar. That’s probably a helpful thing from an ego check perspective.

(1:38:57) Don Valentine, Mike Moritz, and Doug Leone

Jackson: I wanted to talk about a few Sequoia people, starting with Don Valentine. Interestingly, especially in the backdrop of how we started this conversation about founders, Don is a market maxi. In the Stanford talk he gave around 2010, he basically said, “We don’t choose people; we choose markets.” The market has shifted broadly, and Sequoia has changed its tone on this. Is it a more balanced view? Is it just that the market piece doesn’t need to be said, or has something changed about the world?

Andrew: In answering this question, have you read the DTV book?

Jackson: I’ve read part of it.

Andrew: The Sequoia that Don ran was nothing like the world today. That’s one of the takeaways from the book. He did an amazing job building a set of cultural attributes, hiring people, and making amazing investments like Apple, Oracle, Cisco, and Atari. Cisco is really his crown jewel. One of my favorite facts is Cisco’s fiscal year-end. It was July 26 last year because Don hated having a rigid fiscal year ending at the end of the year. He wanted to do something different. His legacy lives on in the July 26 fiscal year-end. I was lucky enough that Don was around a lot during my first few years at Sequoia. I talked to him a bunch. He knew who I was, though I doubt he thought about me as someone who would be a long-term member of the team. The thing that Don did so amazingly was hire Michael and Doug and then hand it off. That generational transition—getting out of the way and letting those two work together to build the modern Sequoia—is incredible. He built the different businesses, geographies, and stages. Don got the big decisions right. The way he handed over this partnership is different from so many other guys who—

Jackson: Had a pretty successful or even amazingly successful career in venture capital, and then the story ends.

Andrew: If we do a good job with Sequoia into the future, the idea of being able to hand it off someday to somebody else—knowing that my time here worked and I made it better—is the thing that drives a lot of us. That’s different than maximizing my net worth.

Jackson: Maybe on that note—and this might be from the book: “Unknown to me at the time was Don’s habit of counting the number of times a candidate used ‘I’ as opposed to ‘we.’ Candidates who favored the first person were dead on departure.”

Andrew: It’s from the book.

Jackson: It’s semantic, but how does that change your psychology?

Andrew: That’s so ingrained in the Sequoia ethos that even when you write a memo about an investment, you use the royal “we.” Writing the word “I” just doesn’t happen. The only time I ever used it was when I was working on the memo for Phantom, not just a crypto wallet. On the back of some of the meme coin mania, I had to excuse James Flynn, who worked on it with me, from sharing his opinion on some of these meme coins. Even then, Pat prints it out, circles the big “I” paragraph, and says he would change it. I knew that, but I just didn’t want to have to.

Jackson: I’m taking the arrows.

Andrew: I was just trying to excuse James from having to opine on this topic. It really is an important thing. Even in this conversation, I described Open Evidence or Harvey as Pat’s investment. I know Pat’s going to listen to this and ask why I said that.

Jackson: The two best question askers ever, according to Don Valentine, are Mike Moritz and Steve Jobs. What makes a great question asker? What have you learned from Mike about that?

Andrew: In some ways, I feel like I’ve learned nothing from Mike because he’s so taste-driven and intuitive. There’s no understanding how one possibly does that. I’ve picked up a zillion lessons, and I’m constantly trying to bring them to practice. But he’ll ask questions that you cannot possibly understand the relevance of until he pops out the other side with a crystallized view of the future. My favorite Mike story wasn’t even an investment that he did. When we brought in Yelp for the Series A, back when it was a desktop restaurant rating service, Mike said—and someday I won’t do my Welsh accent—“Someday every restaurant is going to have a Yelp sticker in their window next to the Zagat sticker.” Literally, it’s in every restaurant. How does one possibly see that? It’s so random but so right. He uses a method to get the ground truth on a person that has enabled him to pick the best sets of founders, younger and younger, time and time again. How he does it beats me.

Jackson: Also from the book, this is Mike Moritz. When I interviewed with Don, I asked three questions that I have subsequently been asked by countless candidates: What does it take to succeed in the venture business? What does it take to succeed here? And when will I know that I have succeeded? How would you answer those questions?

Andrew: Number one is performance. Of Sequoia’s ten tenants, the first is performance and the second is teamwork. In Doug’s words, if you don’t have the first one, the other nine don’t matter. Ultimately, this is a numbers game, and the numbers catch up to you in both ways. If you’re doing a great job and delivering investment returns, eventually you get this compounding benefit that reveals itself in a bunch of different ways. If not, when the tide goes out, and you aren’t doing a good job, you exit the business. That’s true at every venture firm, and it is how to succeed at Sequoia. But the second tenet really matters too: the “we” pronoun and teaming on investments. We have two-person deal teams max. It’s not uncommon for Pat to wingman somebody else. Pat will be doing custom references and writing sections of the memo for an unproven younger guy to go lead an investment. That’s so cool. What was the third one?

Jackson: When will I know I have succeeded?

Andrew: Still working on it.

Jackson: What do you hope or think people ought to know or not forget about Mike Moritz?

Andrew: Ultimately, it’s about performance. He put up the numbers more than you could possibly imagine. Now he’s hard at work trying to fix San Francisco and pursuing numerous other for-profit and nonprofit endeavors. He can make it happen. That’s one thing he can do; he can definitely make it happen.

Jackson: In an interview with Patrick O’Shaughnessy, Doug was quoting somebody: “It’s so wonderful I can’t explain” means run away. Cool is the enemy of reality. I’m curious how you relate to that risk, if at all.

Andrew: The way Doug pursues the business is far more legible than Mike. The interpretability of Mike’s decisions is impossible, whereas with Doug, it’s just doggedness. I wish people could see Doug winning investments. You should talk to founders who have been on the other side of this. It is like Mozart; it’s unbelievable. Doug would give these presentations of a standard Sequoia deck, where a company would come and explain their business. For the last 10 minutes, he would say, “Before I leave, let me just tell you a little bit about us.” He would basically shine the perfect mirror back on the company, showing in extreme detail how well he understands their bottlenecks. He did it in a way where he was not giving them feedback; he was talking about Sequoia, but nailing every single thing. Then there is the hustle. He was flying around the world on a never-ending basis, winning and winning. He is an amazing leader.

Jackson: Doug described Mike as very intuitive and talked about needing to shift a little bit more that way when Mike stepped down, as Doug had been the process guy. To the extent you felt the need, have you felt any need to become more intuitive?

Andrew: I think I’ve always skewed more towards the intuitive side by my nature. Roelof is 200 IQ and understands everything extraordinarily deeply to the nth degree. Jim Goetz is a networking guy from his previous company. Doug was working on some networking thing, and at some point, Jim got fed up and asked, “Doug, do you know what the company does?” Doug just said, “Yeah, top of the rack.” That was it. Of course, we made a zillion dollars. It’s a wild oversimplification and very unfair, but there is a bit of a bell curve here with Mike and Doug.

Jackson: There is a bit of a bell curve here with Mike and Doug.

Andrew: Doug is on the right side of the bell curve. Someone brought these brain-teaser puzzles into our office, where you have to unwrap metal things from each other. Everyone spent the full day trying to do it. Doug just rolls in, looks at it for three seconds, and pulls it apart. To me, they are both maxed out, but Mike’s the maxed-out word-cell, and Doug’s the maxed-out shape-rotator. That’s the best way to describe them.

Jackson: What do you hope people know or don’t forget about Doug?

Andrew: The Nubank investment. He was probably in his late 50s when we did that investment, and it was a seed in a Brazilian credit card company. Having built his whole career doing enterprise investing, I’m sure at various points he felt like, “What am I doing? People are going to judge me.” But he repotted when the last thing he needed to do was go do that. David Vélez, who runs Nubank, was at Sequoia. It wasn’t just a random Brazilian credit card company. Nonetheless, sticking your neck out, being willing to look extraordinarily stupid at that age, and then dominating is the stuff that ought to be in the “how you should do this job” books.

(1:51:29) Closing Questions

Jackson: What’s artistic about business?

Andrew: There is extreme nonlinearity across every dimension, which is really beautiful. It’s just not paint-by-numbers. Nothing about business is paint-by-numbers. It’s so multifaceted and changing so quickly that you can’t possibly see the matrix. You’re constantly seeing something a little bit different every single day and trying to find patterns. Especially in tech, the half-life of an insight is a year or two tops because trades get crowded. That’s true in our business too, and it’s so cool. It’s also stressful. How do you know you’re successful if the metric that matters is net new ARR for a software company? “We’re only as good as our next investment” is a line we end all of our presentations on at Sequoia. If that’s the market I’m in, am I that good? How could I possibly know? In fact, I’m late to all these companies, and David and Sonia are kicking my ass, and Pat’s doing better, and Josh Kushner is doing amazing, and Neil Mehta is doing amazing. It’s so intense.

Jackson: You have a tweet: “Always suspicious of young people who are points guys. Same with tax obsessive. Lack of appreciation of opportunity cost of your attention.” It is hilarious, but I also think it is pretty profound. How do you remember the opportunity cost of your attention?

Andrew: I am suspicious of productivity obsessives in the investing business because you have to follow the spark of your creativity. Maybe some people can pull it off, but I feel like the idea that every meeting has to end at the exact moment is not how your day is going to be. If you find something you love, you have to stay in the meeting and deal with the consequences. In this AI future, forcing yourself to put pen to paper is going to be really valuable.

Jackson: What did you learn studying the classics? I think you were a classics and economics major.

Andrew: Yeah.

Jackson: Unexpected.

Andrew: It’s a left-brain, right-brain thing. I won the Latin prize at Amherst in my senior year. There were two of us who won it: me and a guy named Kevin G. I looked him up two weeks ago to see what he was up to, and he is an SEC enforcement attorney. I was looking at his LinkedIn profile and thought, “Oh, crap.” Shout out to Kevin. I learned a lot of the same thing I learned at Goldman: how to work. Classics was a grind. You are translating every night. Pre-LLMs, you are just sitting there grinding with a dictionary and the Old Testament, the New Testament, the Aeneid, or the Iliad. You are sitting there with a mountain of pages in front of you, and you are chipping away at it. It’s the same with working at Goldman. Do I do DCFs now? No. But the ability to get up in the morning, prioritize your time, and get through it when you are exhausted—of course, you do it. That is how to work and how to really work hard. I didn’t learn that until college. I skated my way through high school, then I decided to take Greek 1 my freshman fall at Amherst.

Jackson: I think you said somewhere that your favorite book was Dune.

Andrew: I love Dune. You know that feeling of getting lost in a story? It is just the best.

Jackson: No messianic aspirations, just being lost in the story.

Andrew: I actually didn’t read Dune until I was a young adult. I had read other sci-fi and had never gotten around to it. I was probably 23 or 24, and it was so sick. There is no reason for it other than that feeling when it was over. I was like, “Damn it.”

Jackson: There are some mediocre books to go read afterward.

Andrew: Yeah.

Jackson: Our mutual friend Tina told me to ask you: what is a film that has moved you to the verge of tears but didn’t make you cry?

Andrew: There is a film called Aftersun.

Jackson: I still haven’t seen it, but I know it is coming for me.

Andrew: I don’t want to talk about it.

Jackson: What’s your favorite thing about Will that is different than you?

Andrew: The thing that I would love people to say about me is that I am ride or die. Will is the most ride or die person I have met in my entire life. I spent my entire childhood as a stutterer being protected by my little brother. Having seen his career success take off and seeing him get recognition for the person that he is is one of the most amazing things. He is the most loyal human being I have ever met in my entire life. He is tough as nails.

Jackson: One more thing I’d like to read. You probably know it, given that it’s in your bio, but I’d like to read this excerpt from Island by Huxley: “It’s dark because you are trying too hard. Lightly, child, lightly. Learn to do everything lightly. Yes, feel lightly, even though you’re feeling deeply. Just lightly. Let things happen and lightly cope with them. I was so preposterously serious in those days. Such a humorous little prig.” “Lightly, lightly. It’s the best advice ever given me when it comes to dying. Even nothing ponderous or pretentious or emphatic. No rhetoric, no tremolos, no self-conscious persona putting on its celebrated imitation of Christ or little Nell. And of course, no theology, no metaphysics. Just the fact of dying. The fact of the clear light.” “So throw away your baggage and go forward. There are quicksands all about you, sucking at your feet, trying to suck you down to fear and self-pity and despair. That’s why you must walk so lightly. Lightly, my darling. On tiptoes and no luggage, not even a sponge bag. Completely unencumbered.” How are you becoming lighter?

Andrew: I don’t have to comment on that at all. That’s perfect. That is it.

Jackson: Thank you.

Andrew: This is wonderful.

Jackson: Thank you for listening. Before I leave you, I’d like to thank Notion for being such an instrumental part of making Dialectic possible. I partnered with them at the end of last year and it has been amazing to have more resources and leverage, but also to get to bounce ideas off them. More than anything, I use Notion to make the show better, whether that be research before the episodes or going in afterwards to pull out ideas, lessons, and patterns that stand out to me. You can check out notion.com/dialectic. I also did a fun Q&A with them on Instagram, talking about how I’m thinking about the year to come and what I’m hoping to build with Dialectic. I’ll link to that in the description. If you enjoyed the show, please give it five stars on Spotify or Apple, or like and subscribe on YouTube. Thank you for listening and watching.