Sequoia Reveals How Much It Has Sitting in Its Sequoia Capital Fund and the Surprising Amount

Almost a year has passed since Sequoia Capital, a 50-year-old investing powerhouse, announced its reorganization around a singular, permanent structure: The Sequoia Capital Fund. Now, thanks to an SEC filing on Friday, we have insight into the fund’s size: $13.6 billion.

What Does this Number Represent?

This figure represents two key components:

• Value of stock rolled into the permanent fund: This includes shares in now-public companies that Sequoia backed as startups, such as Airbnb, DoorDash, Unity, and Snowflake. Some of these shares are owned by Sequoia itself, while others belong to its limited partners (LPs), who have agreed to let Sequoia manage them on their behalf.
• New capital commitments: These will be invested in more traditional funds that sit below the permanent fund, such as the $195 million seed fund announced last month. The idea is that this money will be used to invest in startups that eventually go public and whose shares end up in the Sequoia Capital Fund.

Not All Portfolio Companies’ Shares Are Swept into the Fund

Sequoia has stated that not all of its portfolio companies’ shares are automatically transferred to the permanent fund. Instead, the firm will focus on a "selection of our enduring" businesses, as Alfred Lin, a longtime Sequoia partner, put it.

For instance, when Stripe goes public, rather than distributing its shares to LPs, Sequoia might transfer them from various vehicles used to back the company into the permanent fund. This is done with the expectation that these shares will continue to appreciate in value.

Criticisms and Controversies Surrounding the Strategy

Sequoia’s approach has not been without its share of criticism. Some LPs have expressed frustration, stating they would have preferred to manage out their distributions but agreed to Sequoia’s long-hold strategy to maintain their relationship with the firm.

Industry observers have also questioned whether this strategy is in the best interest of all stakeholders, particularly LPs who may not be able to access or benefit from these investments as directly as the fund itself does.

What’s Next for Sequoia Capital?

Given that the permanent fund has grown significantly, it will be interesting to see how Sequoia allocates its resources and what types of investments it makes in the future. With a larger pool of capital at its disposal, the firm may take on more ambitious projects or invest in areas with high growth potential.

As we await further updates from Sequoia, one thing is clear: the firm’s permanent fund has become a significant player in the venture capital landscape.

Related Topics

• Airbnb, DoorDash, Sequoia Capital, Snowflake, Unity, Venture, Venture Capital

About the Author

Connie Loizos is the Editor-in-Chief and General Manager of TechCrunch. She has been reporting on Silicon Valley since the late ’90s and previously served as the Silicon Valley Editor of TechCrunch.

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