In 2004, Mark Zuckerberg pulled a joke on Sequoia Capital by making an investment pitch in his pajamas. According to other sources, Facebook’s CEO never had the intention of entering into business with the VC company for personal reasons. At the time, Zuckerberg thought he was the one getting the last word in the discussion but the situation has drastically changed 10 years later.
<span style=”color: inherit; font-family: inherit; font-size: inherit;”>As a matter of fact, Sequoia Capital found a way to make money from Facebook while solidifying its position as a “titan venture capital”. Earlier in 2011, Sequoia had invested $8m in the company message service WhatsApp and increased its stake to $60m over the years. When in 2014 Facebook bought WhatsApp for $19bn, Sequoia managed to squeeze a considerable sum out of Facebook, with its stake in the message service company worth about $3bn. The deal itself was expected to provide a 2x return on the $1.3bn fund the initial WhatsApp investment came from and represents a 50x return on Sequoia’s investment in the company. I guess Sequoia got the last laugh.</span>
The Venture Capital has proven incredibly tenacious and this “win” is particularly significant in an era when VC firms must beat business angels, crowdfunding and new technologies that allow startups’ funding easier. Therefore, Sequoia has proven to be the “gold standard” among entrepreneurs as it is involved in the “hottest” startups, it holds its reputation for being ahead of the curve and persuading companies, which believe they don’t need cash, to take it. Finally, Sequoia’s CEO has proven to be able to stay focused on its business while expanding its network and this surely helped the VC company to maintain its popularity.