I'm not sure this direct departure matters that much to Sequoia. The COO Balbale was an operating partner who was CMO of Sequoia for 2 years and then COO for another 2 years and to my understanding did not write checks. The real elephant in the room question was whether Balbale was in a role getting carry or not. If not, then that effectively isn't different from an incentive level than an associate with a higher salary (but no real skin in the game). If so, then that means that carry was actually given up and it probably means more.
In contrast, Maguire (like other partners at Sequoia who are actually writing checks) has skin in the game through the checks he writes and whether they pan out or they don't. In light of that, setting aside his views (which you may agree or disagree with politically), I view his controversy as being most likely a calculated marketing maneuver to improve or maximize the signal to noise in his deal flow. It's hard for me as an outsider to say whether that's working for him or not, but his track record suggests that he's not having problems with his deal flow as a result.
That said -- the material comment at the end of the article does make a lot of sense. While this departure may not affect Sequoia that much, Maguire's position may sour many of the Middle East sovereign wealth funds that form some of the largest parts of Sequoia's LP base. If their discontent with Maguire's rhetoric ends up being more important to them than Sequoia's returns, that may well pose a far more material issue to Sequoia and they will be forced to act.
Funding a seed stage VC with a record of picking winners like Sequoia is probably very easy even without the few sovereign wealth funds from the Middle East. Sequoia’s checks are mainly in the early rounds where the sizes are relatively smaller to series C+. The American university endowments would oversubscribe their rounds multiple times over.
That's a very good point, and there is probably enough appetite in the endowments (nevermind the other large LP archetypes such as pension funds, hospital systems, family offices, etc) to make up for any pullout.
To go one step further, I think I recall recently that Sequoia also moved to an evergreen RIA structure (as well as several other large funds such as a16z, Lightspeed, Thrive, etc), so that's even less of a concern and makes it possible for these firms to capture exits in the evergreen structure and recycle it into earlier stage funds.
Maybe I went overboard trying to soften how non-material this event really seems.
> I view his controversy as being most likely a calculated marketing maneuver to improve or maximize the signal to noise in his deal flow. It's hard for me as an outsider to say whether that's working for him or not
why is it that tech bros will bend over backwards to find "good-faith" interpretations of the most obviously stupid shit. like bro have you literally never heard the phrase "confirmation bias"? you know it's possible he could just be a lucky idiot right?
> In an interview with the Caltech Heritage Project, Maguire reported that he earned a 1.8 GPA in high school and failed his Algebra 2 course, and that his admission to Stanford University depended on letters of recommendation.
1. The fact that he cheated his way into Stanford is completely irrelevant when considering whether he cheated his way into Caltech
or
2. No dummies graduate PhD programs, even T10 PhD programs, just like no dummies are admitted to T10 BS programs
or both.
I hope you understand that one or both of these perspectives is either the height of naivety or more of that backbending work I was talking about before.
He has a PhD in /physics/ from Caltech, and that was before he became an extremely successful investor.
If I had the platform Maguire had, I'd likely it in a different direction. But I'm not him so who cares? He has achieved significant academic and professional outcomes not in spite of but likely because of the way he is.
Just because you don't like someone doesn't mean they're an unaccomplished idiot no matter how gratifying and simplifying that would be. And I think it's really unfortunate that people let their resentment of others outside their tribe (and often their inability to perceive their tribal filters) get in the way of accurately perceiving reality as it is and not the way they wish it worked. It stunts their intellectual development and maturation into an adult, and I think it's just such a waste.
In contrast, Maguire (like other partners at Sequoia who are actually writing checks) has skin in the game through the checks he writes and whether they pan out or they don't. In light of that, setting aside his views (which you may agree or disagree with politically), I view his controversy as being most likely a calculated marketing maneuver to improve or maximize the signal to noise in his deal flow. It's hard for me as an outsider to say whether that's working for him or not, but his track record suggests that he's not having problems with his deal flow as a result.
That said -- the material comment at the end of the article does make a lot of sense. While this departure may not affect Sequoia that much, Maguire's position may sour many of the Middle East sovereign wealth funds that form some of the largest parts of Sequoia's LP base. If their discontent with Maguire's rhetoric ends up being more important to them than Sequoia's returns, that may well pose a far more material issue to Sequoia and they will be forced to act.