Full transcript
0:00The KPI is also what makes it so hard.
0:03And the KPI is generate exceptional
0:05riskadjusted returns for our limited
0:06partners while helping the daring build
0:09legendary companies. You like that's the
0:10KPI.
0:14[music]
0:19Welcome to [music] Partner Path, a
0:20podcast that unpacks the venture capital
0:23and growth equity ecosystem from [music]
0:24a junior perspective. Young
0:26entrepreneurs and investors have already
0:28had a massive impact on the industry,
0:30having started unicorns and launched
0:31billion-dollar funds. [music] We discuss
0:33these success stories and more by
0:35sharing perspectives and advice from
0:36some of the industry's most [music]
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1:29today.
1:30Today we are chatting with James Flint,
1:32an investor at Sequoia. James started
1:34his career at General Atlantic before
1:36joining Sequoia to focus on growth stage
1:38investments. James focuses on AI
1:40application layer, fintech, consumer and
1:43hard techch. Welcome James.
1:45Thanks guys. So excited to be on. So
1:47let's start with your upbringing. Touch
1:48on what you were like as a kid and maybe
1:50some of those qualities that have
1:52persisted to you today as an investor
1:55and just who you are as a person.
1:57Yeah, totally. So just as background, I
2:00grew up in Toronto, really great family,
2:02had the opportunity to go to great
2:03schools, play a bunch of sports, had a
2:04really nice childhood. I think the two
2:07characteristics that that probably have
2:09stuck with me throughout most of my life
2:11are just being super curious and then
2:13being really really competitive. And so
2:16those things when I was growing up, I
2:18spent tons of time listening to
2:19podcasts, reading books, trying to just
2:21like understand the world around me and
2:23it manifested through politics, through
2:25a whole bunch of different subject
2:26matter. So I've always been like super
2:28curious. And then on the competitive
2:29side, I spent a bunch of time playing
2:31sports. Have always really hated to
2:33lose. Whether it's like a very
2:35competitive outside of school sport or
2:37like lunch basketball, I would go back
2:40to class like covered in sweat. Teachers
2:43were probably like, "What's going on
2:44here?" But I just have always hated to
2:45lose. And I do think that both of those
2:46things are probably still relevant in my
2:48job today. You know, we as investors
2:50have to be super curious about all these
2:52different subjects that we're learning
2:53about all the time. And then venture is
2:55a really competitive market. And I think
2:57that we at Sequoia are sort of pride
2:59ourselves on being hyper competitive in
3:02some ways and and liking is a
3:03characteristic that a lot of people have
3:05here and and I think sort of has its
3:07origins for me back as a kid playing a
3:09bunch of sports basically.
3:11Definitely. And I do think we have
3:13learned that Sequoia loves athletes and
3:15they love competitive spirit. And so
3:17that brings me to going a little bit
3:19deeper down the athlete road. I mean,
3:22you played squash and you were a pretty
3:24good squash player from what I've heard.
3:26I'm not sure if you're better than Will
3:27or if Will was better. We can talk about
3:28that later. [laughter]
3:31Maybe touch on the impact that squash
3:33has had on your personal and
3:34professional growth. And I think just
3:35working in a team and learning how to
3:37work with different types of people. So
3:39squash is an interesting thing where
3:41it's it's an individual sport. Maybe not
3:43everybody knows squash is a very niche
3:44racket sport where you hit a ball
3:46against a wall basically. And so it's a
3:47sport that you play on your own. And I
3:49think that that individual sports in
3:51general teach you a whole bunch of
3:53things about relying on yourself. You
3:56know, like there's nobody else out there
3:57with you when things are going wrong.
3:59And there's also nowhere else to point
4:01when things don't go well. Like you
4:03lose, it's like so clearly on you,
4:05right? There's nobody that you can blame
4:07other than yourself. And so I do think
4:08that that teaches you a lot of
4:10resilience and also like self-reliance.
4:12And so I think that's one thing that
4:13from squash has been very valuable for
4:15me. And then I think sports in general
4:17have you know this characteristic where
4:19in overall if you work hard at things
4:22you will get better in sports. You know
4:24people have different levels of
4:25aptitude. People start in different
4:26places in basketball. Some people are
4:28seven feet tall. Some people are 5 feet
4:30tall. But given where you're starting,
4:32almost always when you sort of like
4:34train hard, train intentionally, you get
4:37better at things. And I think that that
4:39is like a very important learning that
4:41comes from sports and just seeing, hey,
4:42listen, I lost that guy last week. Like
4:45now I'm beating him because I did these
4:46things. That sort of like growth mindset
4:49or recognition that work in combined
4:51with a bunch of stuff that you can and
4:52can't control equals outcome is is
4:55pretty powerful too from sports. And so
4:57those are some things on squash in
4:59general. I think working in a team, it's
5:01an interesting thing when you get to
5:02college, and we and I played on the Pen
5:04Squash team together, you end up going
5:06from the sport that's totally individual
5:09to all of a sudden you don't really care
5:11if you win or lose your match so much as
5:13you care what happens to the team
5:14overall. And so when you go through that
5:17transition, it's interesting how it ends
5:19up mattering more to you, how you play,
5:21because it impacts the outcome for your
5:23teammates. And I think there's a lot of
5:25similarities between that and what we do
5:26now where like everybody has their role
5:28to play at an investment firm, but
5:31everybody's success is very much a
5:32function of what what their teammates
5:34are doing. And so I think that sort of
5:35theme has continued to to you know
5:38follow follow me and I'm sure a bunch of
5:40us that played sports in college into
5:42the working world. Are there any
5:44qualities that you think from whether
5:45it's like sports or personal life that
5:47have translated to venture that really
5:49makes you stand out in the venture world
5:51and might be considered your superpower?
5:54Yeah, it's an interesting question. I
5:55always find the superpower question hard
5:57to answer. I think I think it probably
5:59is just like curiosity to be honest.
6:02Like I I do think that
6:05I've always been somebody who's like
6:06gotten maybe the most satisfaction from
6:08feeling like I understand something. And
6:11I do think that like investing in
6:13general is in some ways, you know, all
6:16that matters is your opinion to some
6:18extent, right? There's a whole bunch of
6:19other stuff going on, but ultimately
6:20like investors get paid to have opinions
6:22and to understand how systems work and
6:25to have a view on sort of like who's
6:27going to benefit from that basically and
6:29who is well positioned to to capture a
6:32market or a trend. And I do think that
6:34that sort of like just getting real
6:36satisfaction from understanding things
6:37and then hopefully applying it to make
6:39good decisions is probably like the the
6:41quote unquote superpower. But I don't
6:43know if it's it's so super yet. Still
6:45working on it.
6:46Fair enough. And you actually went right
6:48into growth equity after pen which I
6:51think is unique. A lot of kids from our
6:52school will take the one of the more
6:54traditional finance routes where they're
6:56going to banking or consulting or even
6:58going to a startup. So I'm curious what
7:00was the initial hook to join GA and then
7:03obviously we'll get into Sequoia and and
7:05more of your venture experience there.
7:07I'd say
7:09you know during co I think everybody
7:12spent a lot more time with technology in
7:14general whether that was Zoom or it was
7:16like you know I don't know seeing how
7:20the vaccines progressed and all of a
7:21sudden we could go back to our lives
7:23because of something that tech had
7:24created. And so I sort of like during
7:26that period was very interested in
7:28understanding like listen the thing that
7:30really changes how the world works is
7:31technology. I want to be part of that.
7:34And I think like as somebody who had a
7:35finance background the obvious way to be
7:37part of that to some extent was like to
7:39do it as an investor. And so that's what
7:40I was most interested in tactically
7:43maybe on like the do the two years of
7:45banking and then switch into investing
7:46versus go straight to investing
7:48decision.
7:49I basically decided
7:51the job that I would want to get after
7:53two years of banking would be a job at
7:55one of these growth or venture firms.
7:59Why not try to get that job right out of
8:01school if I could and basically, you
8:05know, forego some valuable training, but
8:07also just start doing the thing that I
8:08knew that I wanted to be doing faster.
8:10And so that's kind of why I decided to
8:12try to go straight to to the buy side,
8:14quote unquote. And GA was an incredible
8:17place to do that. You know, like GA has
8:18a program for people who come out of
8:20school and you get to sort of spend your
8:22time talking with entrepreneurs, doing
8:25diligence on companies, understanding
8:26how one of the best tech investment
8:28firms in the world thinks about making
8:30those decisions. And so to some extent,
8:32it was a no-brainer for me given that
8:34opportunity to kind of jump at it and go
8:36go with that.
8:38Yeah, that makes sense. And I think GA
8:40is a little bit untraditional from most
8:41venture firms in the sense of there is
8:43more of like a structured program. and
8:44you have other analysts. They're
8:46teaching you skills, which is nice. I
8:48mean, you're getting thrown in the fire
8:49as with any byside role, but at least
8:52you're learning along the way. And
8:53hopefully you had mentors and people to
8:55guide you.
8:56Yeah, totally. No, they do a very good
8:58job of of kind of bringing people along
9:00and also giving you like a full stack
9:03investing role right away to some
9:06extent, right? Where you get to be
9:07involved in a deal's entire life cycle,
9:10right? from the very first email that
9:11you send to a founder when they have no
9:12idea who you are all the way to like
9:14extending a term sheet. You even at the
9:17earliest stages get to be part of all of
9:19that and see how the whole flow works
9:21which I think is actually like really
9:22powerful and a real strength of kind of
9:24what they do at GA for people coming
9:26straight to school.
9:27That's amazing experience. What would
9:29you say were some of the downsides of
9:31going into the buy side right after
9:34school or maybe some of the parts about
9:35venture that are less talked about? You
9:39know the downside of going to the buy
9:40side straight after school. I think that
9:42like you definitely give up some
9:44optionality to some extent in your
9:47career. You know like everybody in the
9:48world not everybody but most people in
9:50the world know what Goldman Sachs is. A
9:52lot of people know what General Atlantic
9:53is but like you know orders of magnitude
9:56fewer. And so if you're not so sure what
9:58you want to do then I think that sort of
10:01staying broad doing banking something
10:03that is totally respected by like a
10:05massive group of people can be the move.
10:08I was sort of lucky that I had
10:10conviction that what I wanted to be
10:11doing was tech investing and so I
10:12figured that going to the buy side was
10:14the right thing for me and I I don't
10:15feel like there were too many downsides
10:17for me on venture in general. I don't
10:20know if it's like a bad part but I think
10:22like a really hard part of the job is
10:24that you almost always know less about
10:26the thing you're talking about than the
10:29person you're talking to about it. like
10:31the founders that we spend our time with
10:33just have spent their entire lives in
10:35the categories that that they're
10:37building and are some of the smartest
10:38people in the world. And so you as you
10:41know generally a generalist need to like
10:44come in and try to have an opinion on
10:45that with way less domain information
10:48but then hopefully some useful broad
10:51frameworks and useful context from other
10:53markets to bring to that kind of like
10:56thought process. And that's like pretty
10:58hard to do. And I think like early on
11:00for sure in my first few months at GA,
11:03you know, you're like you're straight
11:04out of school. You literally know
11:06nothing even about like software in
11:09general who are the founders of these
11:10companies. It can be a little bit
11:12intimidating. And there were definitely
11:13moments when I'm sure I sounded really
11:14stupid. And so that's maybe one of the
11:16hardest hardest parts of it.
11:18Yeah. And that's something I think we'd
11:20love to touch on later is trying to
11:21understand how in a room full of experts
11:24and you know people with with more
11:26wisdom later on in their careers you can
11:28act and actually add value in in a
11:31certain degree. But I would love to
11:33double click on your process of joining
11:35Seoia given it's a particularly unique
11:37one. I mean, obviously don't need to
11:38cover all the details, but as Laura
11:40mentioned earlier, we had Romy Boyd on
11:41the show before, who's one of your
11:43colleagues with the growth focus at
11:44Sequoa and and I know she spoke to her
11:47dialogue with Pat Grady and her process
11:49of joining the team. And so, we'd love
11:51to hear your story and your dialogue
11:55with Sequoia and just trying to
11:58understand what Sequoia looks for in a
12:01in a junior investor to start. I think
12:03like Romy, my conversation with Sequoa
12:05started with a cold email that landed in
12:07my inbox. I think it's like a very
12:09Sequoia thing that despite being Sequoa
12:11and having had so much success, like
12:13they're still so proactive in every part
12:15of the business, whether it's hunting
12:17for companies or hunting for candidates.
12:19And so, you know, during that process,
12:23you meet everybody on the team. It was
12:24like a really incredible experience.
12:26Such a great
12:28cell, honestly, for Sequoa to get to
12:30spend time with those people. like you
12:31spend time with the team and you really
12:32understand these people are different. I
12:34think what Sequoa looks for, you know,
12:35the public spec for the growth team and
12:38and I think for investors in general is
12:39kind of like hyperco competitive and
12:40heart of gold. So I I suspect that those
12:42things were involved and I think that
12:43leads to the question about Sequoia
12:45liking athletes and you know there are a
12:46lot of athletes on the team and I think
12:48that's the hyperco competitive piece but
12:49most people who have worked here have
12:51ended up being flagged to somebody on
12:53the team as as just like really doing a
12:55good job in their previous role. So,
12:57it's funny when you get, you know, cold
12:58emails to chat from from people in
13:01college and people ask about trying to
13:02get a job at Sequoia. I think the right
13:04advice is often like just to try to
13:06really crush whatever you're doing at
13:08the time and have just like good buzz
13:13about what you're doing to be honest and
13:14hope that that makes it back to somebody
13:16at Sequoia. So, that's sort of like I
13:17don't know what they look for and like
13:19the process, you know, my process sort
13:21of went you meet everybody on the team.
13:23I then had done my last conversation
13:25with RUF who runs the firm and I like
13:27hadn't really heard from from Andrew me
13:29through the process in a little while
13:31and so that's that's generally like not
13:33a great sign when you're trying to get a
13:35job and and you don't hear from the
13:36company for a little bit. So I I decided
13:38to send a big email basically to Patrady
13:41who runs the team. And I think like the
13:45macro lesson here is when the worst case
13:48scenario of doing something is like the
13:50same as the status quo, you should
13:53probably do the thing. And like cold
13:54emails often fall into this category
13:55where like the worst case scenario of
13:57sending a cold email is that the person
13:58doesn't reply and the world doesn't
13:59change, but sometimes something good
14:01happens so you might as well do it. So
14:02here I sent a big email to Pat basically
14:05like trying to make my case for why they
14:07should hire me. And I structured it a
14:09little bit like a Sequoia investment
14:10memo. And I went through the different
14:12phases of an investment's life cycle
14:13from from like you know picking,
14:15winning, company building as though I
14:17was the company that they were
14:18considering investing in. And you know
14:20Pat replied in in his way saying quickly
14:23just you know great email more to come.
14:24And I was a little bit confused about
14:26what that meant too. But eventually
14:27ended up hearing from Andrew and and got
14:29the job. And I have no idea if it was
14:31because I took the risk to send this
14:32like very long email to Pat, but I'm
14:36very glad that I that I did. Now, a
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15:28Now, back to the episode. I'm curious to
15:30hear, first of all, it's a very creative
15:32idea and and I very much agree with your
15:35approached the world through taking
15:37chances and and figured what's the the
15:39worst case scenario and trying to
15:41understand almost like the option value
15:42there. Did you ever hear from them on
15:44how that made you stand out? Because
15:46there are certain things you could take
15:47out of an email like that, right? It's
15:49someone who's bold and we like that it's
15:52someone who's very introspective and we
15:54like that it's someone who's creative
15:56like you know there there are a lot of
15:58takeaways from something like that. Did
15:59you ever understand the quality or
16:01multiple qualities were from doing
16:03something like that that made you stand
16:05out to the team?
16:06I think the thing that it's not was the
16:08content in the email. You know, like I I
16:10sort of restated my case but brought up
16:12facts and points that they had already
16:15heard about in the conversations. So I
16:17think it's like importantly not the
16:19content. What I think might have
16:21resonated is sort of that I did it. You
16:23know, like there people talk here about,
16:26you know, you need people and we need to
16:27as a team both like go to the gym every
16:29day and do the work, but then we also
16:31need to like be willing to take the
16:33game-winning shot. And and this was
16:35definitely showed at least like a
16:37willingness to take that shot. And so I
16:39think that that was probably an
16:40important part of it. And then I do
16:42think that probably like, hey, listen,
16:43this guy did a good job at the email,
16:45did it in a creative way by the way that
16:48sort of the email was laid out. I think
16:49that all of those things probably
16:51resonated as well. But I think more than
16:52anything, it was just the willingness to
16:54take the shot. And again, listen, I have
16:56no idea if this email is why I got the
16:58job. But I do think that, you know,
17:00that's something that I heard from the
17:02team is like, listen, it was really good
17:03that you that you at least did it.
17:05And then I guess the the natural
17:06follow-up question here is, have you
17:08done something similar or thought about
17:10doing something similar on the job,
17:12right?
17:14You know, like not not really [laughter]
17:17is the answer.
17:19Yeah. I think like you always need like
17:21a classic move in sourcing is the oh
17:24we'll be in the city like do you want to
17:26grab lunch but like you're not actually
17:28going to be in the city and so you sort
17:30of book the flight once you hear back
17:32from the from the person.
17:33Yeah.
17:33And so I've done that a couple times.
17:36You like I've and I think that that's
17:38been that's been successful. I was like
17:40you know have traveled a little bit for
17:42things related to that. And sometimes
17:44you do have to like write the really
17:46long thoughtful email and spent spend
17:49more time than you think you should on
17:52any given one company. And so that that
17:54has definitely happened from time to
17:56time. And sometimes the unfortunate
17:58thing is you spend like two hours
17:59writing this really great email and then
18:00you like still don't hear back from the
18:02person who you sent it to. But in
18:04general, I think like
18:06there's no story that stands out really
18:08from my time here so far. But I do think
18:11like the nature of venture is that like
18:12a handful of companies and investments
18:15make a fund, make a career, make, you
18:18know, just like make it all worth it.
18:20And so you have to be willing to do sort
18:22of like irrationally
18:25deep an irrationally deep amount of work
18:27on those handful of companies to break
18:28in to build the relationship if you
18:30think it has a chance to be one of those
18:32special investments. So none come to
18:34mind, but in theory, you know, I should
18:36do something like that.
18:37Yeah. Yeah. It takes a while. It's a
18:39little bit of a numbers game or at least
18:40can be at least for junior folks. So you
18:43mentioned a little bit about the
18:44framework of assessing a company, a
18:46founder, potential investment. You had a
18:48view on that from the outside in in the
18:50interview process. Now you've been with
18:51Sequoia for for a decent amount of time
18:53now. I guess you're coming up what on a
18:55year. What have you learned about the
18:57underwriting process from Sequoia's
19:00perspective and how does it contrast to
19:04your experience or perspective you saw
19:07at General Atlantic? So GA and Sequoia
19:09are both great investment firms that I
19:12think have sort of underwriting
19:13processes and investment decision-making
19:15processes that that fit both the kind of
19:17return profiles that they're looking for
19:19and also the stages at which they
19:21invest. So J is like a very late stage
19:23growth investor and at that late stage
19:25you know it's mostly about the numbers
19:29and the business and the mechanics of it
19:31and the paybacks and all the software
19:33metrics that that we all see in guides
19:35all over the internet. So that that
19:37tends to be kind of how generalantic
19:39looks at looks at investments. We at
19:41Sequoia are earlier stage and also the
19:45mission of Sequoa is to help the daring
19:47build legendary companies from idea to
19:49IPO and beyond.
19:51Yeah.
19:52And so
19:53quote.
19:54Yeah. Exactly. Okay. And so it ends up
19:55being very much about kind of the
19:57founder and the vision and an unders
19:59market in the world is going and why
20:01this company makes sense given that and
20:04also will be part of driving us towards
20:06that future. And that that is a much
20:09more qualitative thing. And so we think
20:11about building a thesis around a market,
20:14a company, a founder and then using the
20:16evidence that we have from the business
20:19to date in support of that thesis. But
20:22the the evidence and the financial
20:24information is not the story in and of
20:26itself. And there we will never make an
20:29investment in a company just because of
20:30the numbers. The numbers are support of
20:33a thesis that is based on those
20:36qualitative factors that I described
20:38versus I think at later stage investment
20:40firms the numbers are the thesis at
20:42least more so because when a company has
20:45hundreds of millions of revenue you like
20:48kind of believe that the team is
20:49probably good. If the numbers are good,
20:51you kind of believe the market probably
20:52works if the numbers are good. A and you
20:54also need to believe in less future
20:56distance traveled. You know, maybe you
20:57need the company to grow five times to
21:00make three times your money because
21:01you're going to have some multiple, you
21:02know, contraction versus we often need
21:05to or at least hope that the company
21:06grows a thousand times. And the answer
21:08for why a company grows a thousand times
21:10is never going to be in the numbers to
21:12date. It's always going to be in the
21:14team and the marketing. And so we spend
21:17way more time thinking of that than we
21:19do digging into every possible version
21:22of the customer file cut. We definitely
21:24like do all of the same work that was
21:27done at GA. It's just always support of
21:30the story numbers. They're not the story
21:32themselves.
21:33Yeah. Yeah. And and obviously Sequo has
21:35a strong early stage practice. You
21:38personally have a growth focus, right?
21:40And so I'm sure if you were to slap a
21:42coefficient to the importance of founder
21:45and market and business model relative
21:48to maybe other folks on the team that
21:50are have an earlier stage focus, you
21:52probably focus a little bit more on the
21:54business model. So maybe you're on the
21:56journey from GA lens to more of an early
21:58stage lens and somewhere in the middle.
22:00If you try to think through how you
22:02think about I'm using for a lack of a
22:03better term those coefficients if you're
22:05to say founder management team market
22:08and then the company and business model
22:10and how they shift over the stage a
22:13company is at. How have you thought
22:15about the relative importance of of
22:18business model compared to those other
22:20two which are probably the majority of
22:22the percentage at the earlier stages
22:24when you evaluate investment at the
22:25growth stage. The answer is that it
22:28varies company to company so much and so
22:30it's hard to assign like precise
22:32waitings on things. I would say that
22:35business model to the extent that it
22:38comes through in the numbers is probably
22:41a little bit less than half of our of
22:43our decision-m process and then founder
22:46and market probably more than more than
22:48half of what of what we're thinking
22:51about. Um, I think it's interesting
22:53because even at the latest stages that
22:54continues to sort of be true, right?
22:56Like a bunch of people I'm sure buy
22:59Nvidia stock because they're like Jensen
23:01is a badass and he's just gonna
23:04the leather jacket effect.
23:05Yeah. And he's got great style. I I
23:06think like you know founder and and
23:08that's obviously a great market continue
23:10to be important all the way throughout a
23:12company's journey. I think for us like I
23:15said that the business model and the
23:17characteristics of of that in the to the
23:20extent that they show up in the
23:21financials and the customer data is like
23:25very much supporting the thesis around
23:27the founder and the market exceptional
23:30then that often just proves a founder
23:33thesis or a market thesis, right? And
23:35and you have to think about the reasons
23:37why those might change over time and the
23:39reasons why like you know it makes sense
23:42to do this in a certain way in the short
23:44term that maybe makes the gross margin
23:46less pretty but sort of that benefits
23:49you in the long term. But overall you
23:51definitely need those things to all
23:53check out. But I think that we probably
23:55spend more of our time thinking about
23:57the qualitative parts of a company than
23:59we do about kind of the quantitative
24:01financials of it. And if you were to
24:03throw those three factors on a binary
24:05scale, right, you either have it or you
24:07don't. Which one would you say is the
24:09most important to have and which is the
24:11least important at the growth stage?
24:14I still think probably the founder is
24:15the most important just because of what
24:17I said about, you know, the the distance
24:19that needs to be traveled. You know,
24:21even at the growth stage,
24:23we you know, I've worked on investments
24:25in companies with literally zero revenue
24:27and investments in companies with like
24:29more than 100 million of revenue. Both
24:31of those companies we hope get to many
24:33billions of revenue and the path from
24:36where they are now to the future is just
24:38the founder that that's like such a big
24:40part of it. So that's probably the most
24:42important binary factor.
24:44I think it would be also helpful to
24:46unwrap the layers of being someone newer
24:48in your career at Sequoia. What does
24:51that look like? Who are you working
24:52with? What are the metrics or I don't
24:54want to say KPIs, but what does your job
24:56look like? And what would you say has
24:58been the most difficult aspect just like
24:59getting up to speed at such a notable
25:02fund?
25:03The KPI is also what makes it so hard
25:05and the KPI is generate exceptional
25:08riskadjusted returns for our limited
25:09partners while helping the daring build
25:12legendary companies. You like that's the
25:13KPI. I think one of the unique things
25:15about Sequoia is that that's the KPI for
25:17everybody at the firm. It's like a
25:19fairly small group of people. There are
25:21I don't know less than 30 investors at
25:23Sequoia. And so because of that, you
25:26can't really afford to have the
25:27specialization either by sector. We're
25:29all in general generalists or by
25:32function that you can have when you have
25:35a firm with hundreds of investment
25:36professionals. And so everybody's trying
25:38to do those two things. You know, at
25:39Sequoa, our value chain is founder
25:42first, LP second, Sequoia third,
25:45individual fourth, and everybody that
25:48that and the KPIs are kind of the same
25:50for everybody at the firm. So that's
25:52kind of hard in a lot of ways because
25:56there's a bit of a okay like where do I
25:57start, what do I do type of problem. And
26:01so I think early on it's really just
26:04about doing a couple things. One, taking
26:06risks, getting out there, talking to
26:08founders, going to events, just trying
26:11to like be in the ecosystem as much as
26:14as you can. And it's definitely true
26:16that being at a place like Sequoia gives
26:18you an unfair advantage in doing that
26:20because of this platform that's been
26:21built by a lot of people who were doing
26:24it before any of us were born. And I'm
26:27super thankful to get the benefits of
26:28that. And then the other piece of it is
26:31just to try to absorb as much of that
26:33tribal wisdom as you can. When I first
26:35joined, I spent a week shadowing Andrew.
26:38I spent a week shadowing Sonia. I spent
26:40a week shadowing RV. I spent a week
26:41shadowing David and Pat. you know, like
26:43you just need to really spend time with
26:46the people who are the best in the world
26:48at this and understand how they do the
26:50job. And so those are probably like the
26:53two ways to help get up to speed, but
26:56ultimately we're all still figuring out
26:58how to do those overarching goals of
27:00helping the daring build legendary
27:02companies and generating exceptional
27:03riskadjusted returns for our limited
27:05partners. actually an interesting thing
27:06like Sequoa is a place where there's a
27:08lot of phrases that are repeated and you
27:13know if if the place didn't like live
27:15those values and those phrases so fully
27:18it would seem like kind of nonsense
27:21propaganda and definitely like I I can
27:24understand why it may seem like that
27:26from the outside but the reality is like
27:28the it's actually legit and so even
27:31internally you end up being like just
27:33sort of consumed by those goals and
27:36consumed by the way Sequoia thinks about
27:39them so much because everybody else is
27:42and because they're actually like worthy
27:45goals and so it's pretty legit.
27:48I mean that's fair enough. I also think
27:49you can hear founders speak for
27:51themselves when they speak about Sequoia
27:53and what they're telling others. I think
27:55it resembles what you're telling us
27:57today. And that's always the best check
27:59that we say when people are debating
28:01working with us. We just say, "Hey, call
28:03our founders. I'll tell you the truth.
28:04They'll give it straight up what we're
28:05like to work with. And if we do embody
28:07the values that we're sharing with you
28:09verbally.
28:10Totally. Totally. No, that is the the
28:12ultimate test always.
28:13Maybe if you could just touch on what
28:15percent of your job is like sourcing,
28:16diligence, and then you've worked with
28:18some pretty successful companies such as
28:20clay and touch on how you're adding
28:21value at the portfolio level.
28:23On sourcing and diligence, it varies so
28:25much week to week. I think roughly it's
28:28probably
28:30close to 5050 in terms of meeting
28:33companies pretty close to the top of the
28:35funnel to like doing real execution work
28:37on companies when we're when we're in
28:39the heat of an investment decision. And
28:41both of those parts of the job are super
28:43interesting and they obviously like flow
28:45together to some extent. When you're
28:46doing diligence, you're blind unless
28:49you've you've talked to the other
28:50companies that are playing in the
28:51category. And when you're sourcing,
28:54you're blind unless you've actually gone
28:55deep on a company in that space and
28:57understand what things look like when
28:59you unpack it and have gone actually
29:01really deep on the on the market. So
29:02those two things I think are are
29:04symbiotic in a way that's not always
29:06talked about, but it's close to 50/50 on
29:08those things. And then on the portfolio
29:10level in general as a junior person, you
29:12have to like out hustle or or at least
29:15like be willing to really hustle to make
29:18an impact on portfolio companies when
29:20you're working with them in a way that
29:22you know you probably have to do or at
29:24least when you've been doing this job
29:25for 20 years you have more ability to
29:28say when I was on the board company we
29:30did this and that applies to your
29:32current situation in this way. As a
29:35junior person I think it's really about
29:36like a couple things. one like doing the
29:38work on the numbers and being very
29:41truthtelling on reflecting back to the
29:43company what we see when we look at
29:45their business because companies don't
29:48always look at their businesses in the
29:49same way that investors do and that's
29:51like overall a really good thing but
29:53sometimes there are things that
29:54investors do and analyses that we
29:56conduct that's often a junior person
29:58thing that's really valuable when you
30:00show it back to a company and so I
30:01remember and way that junior people in
30:03venture can add value is that there's
30:04sort of this like junior person in
30:06venture whisper network that exists
30:08where like people are always talking
30:09about companies. People are always
30:10mean the rumor mill.
30:11Yeah, the rumor mill. Like people are
30:13sharing numbers. Sometimes you get these
30:14like WhatsApp messages that are like 50
30:16lines long with like bullets on a whole
30:18bunch of different companies and you're
30:19like who typed this up on their phone,
30:22but but it's great. Please keep sending
30:24them. And so I do think that like having
30:25that finger on your pulse of what's
30:27going on in the competitive landscape
30:28can often be be pretty helpful and you
30:31can understand
30:33where the heat is to some extent, what
30:36new companies are popping up in the
30:37category, how people are how people are
30:39doing in a way that like companies are,
30:42you know, customer aware or customer
30:44obsessed but competitor just aware. And
30:46I think that we spend more time thinking
30:49about the broader competitive landscape
30:50or at least hear more things randomly
30:52about the competitive landscape. And so
30:54surf surfacing those things up to
30:56companies is often valuable and like a
30:58uniquely more junior person in venture
31:01thing because once you're like very
31:04senior, my sense is that you just like
31:07there's less of this chit chatting
31:08chattering that goes on just because
31:11maybe you're more mature and know that
31:12it's like a dangerous thing to do. or
31:14maybe because it's more direct with the
31:16folks at other firms a little bit
31:18because you guys are like going up
31:20against each other as like really
31:22leading those deals. So just kind of
31:26surfacing what we hear from this big
31:27rumor mill that exists in the venture
31:29industry is also a way to be helpful.
31:31How does Sequoia think about investing
31:33in competitive companies? And by that I
31:36mean like you said it's a very flat
31:37organization. you have at least 30
31:40investors. And so partners may have
31:42opinions on different companies on who
31:44they think might be the winner in that
31:45category. And if everyone's a
31:47generalist, then deploying capital can
31:49go into similar spaces. How does your
31:51team think about that?
31:53We never want to invest in two companies
31:54that do the exact same thing. That I
31:57think is true for probably every venture
31:59firm in the world. The nature of early
32:02stage investing is that companies don't
32:04always end up doing exactly what you
32:06thought they would be doing when you
32:08invested in them and people weave and
32:11you know change over time. So I think we
32:14we understand there's always the risk
32:15that companies end up competing in some
32:18way. Hopefully again it's not like
32:19perfect overlap but there's always a
32:20risk there's going to be some over and
32:22so that's kind of just we view it as the
32:26nature of the business to some extent
32:28and there are a whole bunch of systems
32:29that we have internally and ways
32:31information is firewalled. You know,
32:33during portfolio review where we talk
32:35about the whole portfolio, sometimes
32:36people get up and leave the room if
32:38they're on the board of a company that
32:39is maybe in the same universe as a
32:42business that's being discussed.
32:44Instacart and Door Dash is probably like
32:46a classic example of this with two
32:48scaled companies that Sequoia worked
32:49with where, you know, those two
32:51companies didn't do the exact same thing
32:54to start, but over time the sort of food
32:57delivery and in general delivery market,
33:00you know, became very competitive and
33:02everybody tried to do all sorts of
33:04things in a bunch of different item
33:05categories. And so now they're just
33:07systems. We still are investors in both
33:09those companies and there's a way that
33:10we make it work so that information is
33:13sort of only available to people who it
33:15should be and we can be great partners
33:17to both of those companies at the same
33:18time. So the answer is basically ideally
33:20we don't invest in companies that are
33:22completely overlapping. Sometimes
33:23overlap does happen and when it does we
33:26just try to make sure we're doing the
33:28right things for both of those companies
33:30by by keeping any competitive dynamics
33:33that might exist like very walled off.
33:36One question that's a different take on
33:38on competition and more towards the
33:40valuation side of things. I'd be curious
33:42to get your thought on is you mentioned
33:43it a couple times. you're helping the
33:45daring build these incredible businesses
33:47and you're less oriented around maybe
33:50valuation especially at the early stages
33:52and I think there are a handful of
33:53investors who take a similar approach
33:54right it's a binary we need to be in
33:57this company and as a result like we're
34:00okay to a certain extent paying whatever
34:02I'm curious to explore to a certain
34:04extent and understand have you seen
34:07businesses that have priced in too much
34:10opportunity too much growth maybe the
34:11founder is so good that it actually
34:14doesn't make sense to make an investment
34:16at that valuation. And I guess the
34:18reason I say that is because we're going
34:19to move into the AI application layer
34:21and then the infrastructure layer where
34:23there are some incredibly competitive
34:25rounds where you're seeing billion two
34:27billion plus on either pre-revenue or
34:30extremely early days. Have you guys
34:33intellectually explored what is too
34:35severe of a valuation gap?
34:38Yeah, for sure. at the growth stage you
34:39have to because the thing that matters
34:41most to be honest and the analysis that
34:44that we've done and I think a bunch of
34:45people have done like revenue multiple
34:48you can pay crazy multiples of revenue
34:50for really early stage companies what
34:52matters most is like really absolute
34:55valuation right there are just only so
34:58many $200 billion so if you're trying to
35:01generate a 10x return and you're
35:04investing at a $20 billion valuation you
35:06need to be like really sure that this
35:07company is going to be like one of
35:09literally the best I don't know how many
35:11$200 billion companies there are but
35:12like probably not more than a hundred I
35:15would be surprised companies in the
35:17world and and so that's just like a
35:20different level of conviction that you
35:22have to have and so
35:24100% valuation matters. I think this is
35:27the hardest part of the job is
35:28understanding like where do we lean
35:30forward on valuation and where do we
35:32sort of draw the line and say listen
35:34this is this is just too too much. I'm
35:36not going to name any specific companies
35:38that I think are overvalued.
35:39Totally fine
35:40thing to do. But I do think this is one
35:42of the things that that we think about a
35:45lot and I think it's more so from like
35:49an absolute valuation perspective than a
35:51multiple perspective which is
35:52interesting and
35:55you don't need to think about it as much
35:56at the earliest stages because if you're
35:58investing at 150 post or 175 posts maybe
36:02that doesn't matter too much. If it
36:04works, you're going to be really, really
36:06happy. And if it doesn't, then you're
36:08going to be sad. And that's just a
36:10little bit binary. At the growth stage,
36:12you definitely have to be valuation
36:14concerned. And we often do get our way
36:17to like think our way through to paying
36:19prices that feel like we're paying two,
36:22three, four years ahead quote unquote of
36:25what the public markets would value the
36:27company at today. But you just have to
36:29have conviction that listen, if this
36:31company is going to keep compounding at
36:3440% for the next 10 years, then two to
36:37three years ahead is not something that
36:40is really that concerning. And
36:42ultimately, when you catch up to the
36:44valuation that feels perfectly in line
36:46with the comps, you're going to still
36:49have seven or eight years of of
36:50compounding at 40% ahead of you. And
36:52that's really really attractive, right?
36:54and and at that point you're sort of in
36:56a place where you don't have any more
36:58multiple contraction and so you just in
37:00theory returns keep compounding at the
37:0240% that the business is growing for
37:04those years seven through or three
37:06through 10 and so you can feel really
37:09good about that and so that I think is
37:11kind of the lens through which we view
37:13these later stage investments that we
37:14make in really really high quality
37:16companies where you're still paying
37:18ahead for sure of what the public
37:20markets would think right now but you
37:23have a lot of belief belie that this is
37:24a business that just has all these super
37:26amazing characteristics and will keep
37:28compounding for the long term, right? I
37:30think like I don't know there are a
37:33whole bunch of companies in the late
37:34stage of Sequoia's portfolio that that
37:36look like that and I think we feel
37:37really great about those investments.
37:38Even if you know you dropped them into
37:41the comp set right now, it would still
37:43seem kind of expensive.
37:44I do want to be conscious of time. Maybe
37:46we just jump into understanding a little
37:49bit more about where you're interested
37:51in exploring new companies and new
37:53founders. Hopefully, one or two will
37:55come to you after listening to this and
37:56hearing your insightful view on on
37:58valuation and judging people. So, t talk
38:01to us about the AI application layer
38:04where I understand you're spending time.
38:06Maybe before we get into specific
38:08examples, what's your view? What's
38:10Sequoia's view on the macro view? And do
38:13you think it's helpful to draw
38:15similarities to either cloud the prior
38:18software application proliferation or or
38:21the mobile development? What's your
38:24personal and team view on the overall
38:26backdrop?
38:27I'd say in general there isn't like a
38:29house view on these things and I'm
38:32speaking for myself not for Sequoia. I
38:34think everybody has different slightly
38:35different opinions and I think that's
38:36really great and healthy. My view is
38:40that we're basically starting to see the
38:43dream come true over the past year or
38:46so, call it. You know, I think like I
38:48would define the dream as AI can do a
38:51lot of the work that people find to be
38:55repetitive. They don't find to be
38:57particularly creative and it's not the
38:59stuff that makes them get out of bed in
39:00the morning and be really excited to go
39:02do their jobs. And I think that AI now
39:05is actually like being deployed across a
39:07whole bunch of different categories
39:08whether it's healthare or legal or go to
39:11market in go to market teams or coding
39:13and like doing a lot of that work that
39:16people weren't that excited about and
39:19doing tasks end to end for them. I think
39:22that that's probably the biggest change
39:24over the past six months is these like
39:26full-on agentic workflows that the
39:28models can take on for people. And that
39:31is really transformative when you think
39:33about how we engage with software
39:35because over the past 10 years software
39:38has been a thing that's allowed humans
39:40to be more productive but ultimately
39:43humans are still taking most actions
39:45versus now like you can tire chunks of
39:49work to these models in a way that just
39:52lets people not even need to think about
39:54it. And just from like a cognitive load
39:56standpoint, like I know that when I
40:00don't know, when I was at General
40:01Atlantic, we would have we had interns
40:02in the summer and it's like so much
40:04better to just know like, hey, listen,
40:06I'm setting this off to the side.
40:07Somebody else is going to deal with it
40:09and I can like focus on the things about
40:10my job that I really like and are super
40:12high leverage and are super creative.
40:14And I think that we're getting there
40:15with the models. And so I think like me
40:18and most people here are like very
40:20bullish on this generation of agentic
40:22stuff that we're seeing happen in AI.
40:24And we I think it's like going to be
40:27probably more transformative past
40:29technology shifts just because the like
40:32fundamental point of doing things
40:34autonomously is like really
40:36qualitatively different than just doing
40:38things better or a little bit more
40:40efficiently. What are the implications
40:42on education as you think about the
40:45impact that this will have? Obviously,
40:47if you draw a similarity to or you make
40:49the analogy to the industrial
40:51revolution, there aren't blacksmiths or
40:53people creating building railroads
40:55anymore. I guess I'm curious to hear
40:57your thoughts. If there are agents that
40:59are handling full tasks that
41:01historically were handled by humans,
41:04what are the implications to the
41:05importance of education and the cadence
41:08at which people need to learn new
41:10skills?
41:11I think this is like a really important
41:13question. It's not one that actually
41:15impacts our day-to-day jobs, but it's
41:16one that I think we all think about
41:17because we live so close to this AI
41:18wave. I'd say like on education the one
41:21implication is that I think that all
41:24educational assessments and all
41:26educational learning should be basically
41:27like open model right like I think that
41:30people should get to bring these models
41:32with them into test taking environments
41:34and collaborate with them throughout
41:36their educational journey because like
41:38that's how the real world is going to
41:39work. And so I think that like the worst
41:43thing that the education system could do
41:45is basically like totally shut this
41:46stuff out and say no AI in the classroom
41:49because like then you're just leaving
41:51people totally unprepared for what the
41:52world is actually going to look like.
41:53I'm pretty bullish on us finding
41:55productive uses of all of our times, you
41:58know, like in the 1800s I think like you
42:01know 80% of people worked in
42:02agriculture. Now that's like 2% and
42:04we're okay, right? Like we found jobs to
42:06do.
42:07I think we're going to keep finding jobs
42:08to do. I don't totally buy the like
42:10we're all going to just be like sitting
42:11on the beach like drinking and letting
42:14the models do all the work for us. That
42:16seems unlikely to me partially just
42:18because I think people like want to be
42:20productive and want to sort of like do
42:23things that give them meaning and also
42:25feel like are impacting the world. So I
42:27think we'll like continue to find things
42:29for people to do. I'm not super worried
42:30about that. But I do think that it's
42:32going to change just swinging back to
42:33more generalist kinds of jobs and kinds
42:38of education being really important
42:39because like creativity and critical
42:41thinking and decision-m will be the
42:43things that are most important, not just
42:44kind of gathering of information or
42:47synthesizing of that information or
42:49knowing the information in your head,
42:51right? Because it's all available at our
42:53fingertips in a way that goes beyond
42:55even what it is with just Google because
42:57you just like get the answer. You don't
42:59have to go find the answer. And so I
43:01think that like I'm pretty excited about
43:02what it means for how the labor market
43:05works and how we all get to spend our
43:06time. And my biggest point would just be
43:10I think it would be really really really
43:11dumb for schools to wall off AI because
43:14I think like you should prepare people
43:16for the way the world is going to work
43:17when they have to go into the workforce
43:19and I think AI is going to be a really
43:20important part of that.
43:21Do you want to jump to a fire round
43:23here?
43:23Four quick questions.
43:25Let's do it.
43:26What's one non-portfolio company that
43:28you're excited about? Yeah, I I don't
43:30have a specific company. I'd say one
43:31non-portfolio theme that I'm excited
43:34about is like stablecoin powered
43:36consumer finance applications. You know,
43:38we invested in Bridge that just got a I
43:40think that Bridge is doing amazing
43:41things at the infrastructure layer. I
43:42think there are going to be a whole
43:43bunch of companies that use stable coins
43:45at the consumer app layer specifically
43:48for sending money across borders at like
43:50a much lower fee rate than has
43:52historically been possible. And I'm like
43:54super super excited about that because I
43:56think that the charges on remittances
43:58and sending money across borders is like
43:59one of the most regressive taxes in the
44:01world basically.
44:02And what's the best way to blow off
44:04steam?
44:05I think it's still sports like squash,
44:07basketball, skiing, whatever. It's like
44:10you can't think about anything else when
44:11you're playing sports and and that's
44:12really great. Honestly,
44:14what's one thing you've changed your
44:15mind on?
44:18I think just like the power of teams,
44:19you know, growing up playing individual
44:20sports, you think like, you know, it's
44:22all on you. I think it's really powerful
44:24when you realize like it's it shouldn't
44:26be all on you and it also doesn't have
44:28to be. And so I think here like we lean
44:30on each other all the time and it's
44:33super powerful and I probably didn't
44:34appreciate how important that would be.
44:36What's a piece of advice you'd have for
44:38a junior in college interested in
44:40venture?
44:41Spend time with people who are actually
44:42going to build and work at companies,
44:44not just invest in them. Like I know at
44:47least at Wharton there were a lot of
44:48people who wanted to invest in startups.
44:50There were like not that many people
44:51that I interacted with on a daily basis
44:53that wanted to startups and at the end
44:56of the about people who are building the
44:57companies not about the people who are
44:59investing in them and so trying to meet
45:01people who are building the companies
45:02and want to work at the companies is
45:04like really really important and I think
45:06probably underrated.
45:08Great. Well James thanks so much for
45:10jumping on. It's great to see you man
45:12and uh excited to keep the dialogue
45:14going. Yeah, thanks for having me, guys.
45:16[music]