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Top Chinese think tank: China will fare worse than US from a tech decoupling

Feb 9, 2022

February 9, 2022 You may know Maria Avgitidis as “ @realmatchmakermaria ,” TikTok’s favorite reviewer of dating profiles. She’ll tell you which pictures need to be swapped out, why putting your Instagram handle in your profile is a red flag and whether you’re sharing too much or too little before you get swiped. Avgitidis is also the owner of Agape Match, a high-end matchmaking company in New York City. For more than a decade, she’s been working with clients to help them find love in an increasingly digital, app-centric world. It’s harder than ever to just meet someone in a bar, she said — and not just when a pandemic makes bars impossible. For our second episode in a monthlong series about how tech is changing dating, love, relationships, sex and what it means to be a human in a world filled with other humans, Avgitidis told us about what it takes to make a perfect dating profile, how she helps her clients get off dating apps and into the real world, why swapping Instagram handles is more of a second-date thing and much more. You can hear our full conversation on the latest episode of the Source Code podcast , or by clicking on the player above. Below are excerpts from our conversation, edited for length and clarity. Sandra Colner, CCRA is Head of the Lab & Life Sciences Vertical at Intel Corporation. In this role, Sandra leads a team of technology and subject matter experts that focus on digital transformation from edge-to-cloud in order to make precision, value-based care a reality. She works to design and build laboratory instruments and compute appliances that deliver innovative technology the pharma/biopharma, life science, genomics, environmental and life science industries. With over 20 years of industry experience, Sandra brings deep clinical, healthcare, clinical research and pharma development experience. She holds a Bachelor of Science in Health Science from Pepperdine University and is an ACRP Certified Clinical Research Associate. February 4, 2022 The biopharma manufacturing industry has seen incredible growth in just the past couple years, with the pandemic spotlighting a need for the industry to move quickly and effectively to bring new drugs, vaccines and therapeutics safely to market. The result has been a drastic increase in the pace of innovation, largely driven by the ability to use technology and collaborate at global scale, turning a process that would typically take nine years into just nine months. As we move into a world after COVID-19, the biopharma industry must understand how to maintain this pace of innovation without forfeiting precision or quality. Smart manufacturing — otherwise known as Industry 4.0 — converges IoT, software-defined infrastructure, advanced analytics and AI to create more flexible and interoperable digital manufacturing platforms. Infusing traditional manufacturing with better decision-making and analytics to be done at the edge will be key to propelling the industry forward. Your browser does not support the video tag. Maintaining product consistency and optimizing yield For biopharma, the two biggest pain points are maintaining product consistency and optimizing yield as batches are typically produced in thousands at a time. If there is a loss in integrity in the product at any stage of its production, that could mean the entire batch would need to be destroyed. That’s why it’s critical to be able to measure and monitor processes and parameters using certain instrumentation to extract insights, which requires significant computing power — this is where IoT and edge computing come into play. As manufacturers embrace digital transformation, sensors are being used at almost every touch point across the production line to generate a wealth of data and valuable insights, especially if analyzed in real time. This data needs to be processed where it is being collected — at the edge — on the plant floor at machine level to enable operators to extract quick insight into what’s happening so they can make the necessary adjustments. Edge analytics in biopharma can provide real-time insights to help identify potential issues on the manufacturing line. Actioning quickly to resolve these issues can mean the difference between losing a whole batch of product, such as vaccines, versus fixing the issue and continuing production. Moving toward personalized medicine The biopharma manufacturing industry is moving toward more-personalized medicine, which has the potential to treat a wide range of chronic conditions or potentially reprogram the ways our bodies fight disease, aiding in treating diseases that have been previously untreatable and ultimately save lives. In this patient-centric future, medical professionals would be able to prescribe treatments that match an individuals’ unique pathology. However, producing personalized medicine creates complex manufacturing challenges related to decreased batch size and rising costs. We’re in the early days of understanding how to shift away from a one-size-fits-all approach, but what’s clear is that the traditional approach to manufacturing will not suffice. A supply chain that uses machine learning and AI to learn and adapt could be one way for biopharma to use data to improve manufacturing and the distribution of a product. And perhaps biopharma can learn something from the consumer industry, which is already well on its way to producing individualized goods. Advancing the pace of scientific discovery using AI With the increasing use of AI, modern clinical, pharma, agriculture and research labs will be able to operate with greater speed and effectiveness by using data in new ways and applying sophisticated analytics. Pathologists, for example, may use AI systems in combination with their expertise to expand access to care, while pharma research scientists may use AI to suggest new drug targets and candidates from complex computer simulations. Intel technologies for data analytics, automation and virtualized deployment of applications are helping chart a path for the future by improving workflow and efficiency. In addition, Intel technologies are supporting connecting globally distributed labs to improve collaboration and accelerate results. With these technologies as the foundation, we may one day see R&D labs being able to leverage increased automation with cloud computing while operating on a globally distributed platform. This would also lead to more opportunities to use advanced AI to both analyze the data and modify experiments in real time. Such a future could free up time for researchers to run experiments at massive scale, or collaborate more closely with other researchers, which could in turn advance the pace of scientific discovery. Where do we go from here? New process control technologies and improved operational efficiencies will deliver the necessary quality, precision and cost-effectiveness to move next-gen therapeutics forward. This can only be achieved if the industry embraces the shift to smart manufacturing, particularly with the use of IoT and edge applications. As the pandemic has made clear, almost every industry and human depends on the success of biopharma to keep communities safe and healthy. Smart manufacturing, driven by IoT and edge innovations, provides the industry an opportunity for a simplified, protected and autonomous way to lower costs, increase efficiency and enable greater access to treatments, while maintaining the necessary precision and quality. Keep ReadingShow less Sarah Roach is a reporter and producer at Protocol (@sarahroach_) where she contributes to Source Code, Protocol's daily newsletter. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school's independent newspaper, The GW Hatchet. February 9, 2022 It’s easy to get too in-the-weeds when it comes to the metaverse : an embodied, interconnected network that doesn’t exist yet. Right now, a “work metaverse” is best defined as a virtual office headquarters that you can navigate as a digital avatar. You might call it a multiplayer video game … except it’s where you’re supposed to get stuff done. Plenty of people are skeptical about this way of working. It’s cool that you can turn your desk into a pirate ship and everything, but the idea of spending all your time as an avatar in a digital office is jarring. Still, some companies swear by these spaces, spending hours upon hours in their virtual HQs. In December, Protocol wrote about three of the big “work metaverse” companies and explored the feeling of these platforms. But since the experience is so visual, we wanted to show you the “work metaverse” in video form, in all its usefulness and absurdity. Reporter Sarah Roach gets a taste of what it’s like to work in Gather's, Teamflow's and Virbela’s metaverses. In addition to wandering around and talking with co-worker Lizzy Lawrence, she races go-karts, draws on whiteboards and performs complicated dance routines. From Your Site Articles February 8, 2022 What might have been the largest chip acquisition in history is officially dead. Now Arm, one of the most important companies in the industry, must chart a new path forward. Late Monday, amid regulatory pressure on three continents, SoftBank and Nvidia said they have abandoned Nvidia’s troubled $40 billion bid for Arm. The deal was always a long shot for Nvidia : The potential Arm acquisition encountered resistance from U.K. regulators and officials in its native country, but also ran into problems in the EU, and was the target of a Federal Trade Commission antitrust lawsuit in the U.S. China’s approval wasn’t a sure bet either. The deal would have added Arm’s chip designs, which power most of the world’s smartphones, to Nvidia’s assets and potentially given Nvidia a way to even further challenge AMD and Intel in the data center. But for Arm, the stakes were considerably higher. SoftBank said Monday night that it now plans to take Arm public once again, and will complete the process by the end of March next year. It also said that CEO Simon Segars had resigned, and would be replaced by Rene Haas, who was head of the company’s IP group. The new direction on which Arm is set to embark was one it insisted it didn’t want to take up until Monday evening. In the year and a half since Nvidia announced the deal , Arm has said in blog posts and regulatory filings that a combination with Nvidia is a better outcome for the company than an initial public offering. The argument advanced by executives was that without Nvidia’s vast resources and ongoing support of developing Arm’s designs, Arm will fall behind and fail to grow into new markets, such as the data center. Last year, Segars took the argument a step further, and wrote that an IPO would, in fact, damage Arm’s ability to grow and innovate. “We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate,” Segars wrote in a blog post last year. “Combining with NVIDIA will give us the scale, resources and agility needed to maximize the opportunities ahead.” But during a briefing with reporters early Tuesday, Arm executives said the company is enjoying the fruits of a strategy put in place roughly four years ago that involved focusing on more profitable markets and shedding units that operated at a loss. Going public, Haas said, would give Arm more access to cash should it be necessary to fund innovation. “As I think about the next five to seven years or so, being a public company actually gives us access to capital should we need it,” Haas said. SoftBank disclosed Monday that it expects Arm’s fiscal 2021 adjusted profit to rise to $900 million, on revenue of $2.5 billion, but didn’t disclose the factors it took into account making those adjustments. Despite Haas’ optimism about Arm’s chances, industry watchers are skeptical about Arm’s ability to fund a big push into the data center without help from Nvidia or by other means. If Arm is banking so much profit this year, it’s unclear why it would also need to raise more cash through an initial public offering, according to Dylan Patel, who founded SemiAnalysis. “Why are you talking about raising capital to fund development if you’re profitable?” Patel said. What’s clear is that competing with the x86 server chips produced by AMD and Intel has proven costly and difficult. Leading edge node chips are expensive to design, with estimates ranging from $80 million to more than $500 million for a single chip generation. Arm designs made by the likes of AWS and others have made inroads into the data center market but haven’t significantly disrupted AMD and Intel’s duopoly to date. “If they don’t have a cash infusion, they’re going to find it very hard to compete, in particular, in the data center, the big, big money-maker,” Creative Strategies CEO and tech analyst Ben Bajarin told Protocol. “Anything outside of the [Nvidia] deal will not yield results. An IPO will not yield them a massive amount of cash they can then go and spend on R&D.” On Nvidia’s part, if it had managed against the odds to close the Arm acquisition, it would have boosted an already successful company through deeper integration of Arm’s tech. But Nvidia can still work closely with Arm’s designers as an architectural licensee. Without Arm, Nvidia will undoubtedly continue its growing success in data center chips. It already enjoyed a strong partnership with Arm and its data center product strategy — including its Grace server chip and its data processing unit products — is in no danger of being hurt. Baird chips analyst Tristan Gerra wrote in a research note Tuesday that there was no change to his outlook on Nvidia or its tech roadmap. “We expect Nvidia to continue leveraging its Arm-based architectures, notably with its Bluefield DPU product roadmap, with programmable Arm cores complementing GPU and smart [networking card] architectures, offloading from traditional x86-based configurations and notably serving AI cloud native applications,” he wrote. Aside from losing out on the possibilities of a deeper collaboration with Arm, the main downside for Nvidia is the additional $1.25 billion breakup fee it now must pay to SoftBank. But Wall Street expects Nvidia to book a $11 billion profit in its current year, according to analyst data from Sentieo. From Your Site Articles Photo: Russell Yip for Protocol February 8, 2022 Biz Carson ( @bizcarson ) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett. February 8, 2022 109. One billion dollars. Roelof Botha used to write 109 on the corner of his notepad every week when he started at Sequoia 19 years ago. It was a shorthand to keep himself focused on picking exceptional startups to deliver his private goal of $1 billion in total gains. It was also a milestone that he felt would mean he would have had a measurable impact on the venture firm. He hit the 109 goal thanks to investments in companies like YouTube, Instagram and Square. In 2020, he even reached 1010, or $10 billion in total gains, putting him in the top tier of tech investors. One thing haunts him: How much more could Sequoia have realized if he’d let those bets ride? Square, now Block, has grown tenfold in value since its IPO, even taking into account the market’s recent retreat. “I’ve never sold a share of Square since we invested over a decade ago, and it served me well,” Botha said of his personal holdings. “So why wouldn’t we be delivering the same thing for our LPs?” Today, Botha’s impact is more than the dollars he’s returned. An IPO or acquisition used to be the natural end of a VC’s dalliance with a company. Botha wants to upend that — for Sequoia, if not the whole industry. Sequoia’s move, seeded by an idea from Botha, was to create the Sequoia Capital Fund, an evergreen venture model that will allow it to hold onto the stakes of its winners past the traditional 10-year VC fund clock. Eliminating that artificial limit suits Botha, whose favorite part of his job is working with founders from early company days well into the public markets. He still serves on the boards of public companies like 23andMe, Unity and Natera. In fact, he questions what it means to be a “VC” these days. As leader of Sequoia’s U.S. and Europe business, Botha is in charge of keeping the firm at the top of its game. “He doesn’t want Sequoia to be the 10th best firm, or even the third,” said Sequoia partner Jess Lee. Photo: Russell Yip for Protocol “I think of myself as being part of the Sequoia team, where I get to work with founders to help them build phenomenal businesses. And I don't really want to call myself a VC. It's because we're not fungible in that manner. I'm a non-fungible token,” he said with a laugh. Botha’s own history, going from a Tupperware salesman to a 28-year-old public company CFO to one of Sequoia’s youngest partners, is one of a kind, certainly. And founders laud his integrity and intellect. At 48, he has ascended to become head of Sequoia’s U.S. and Europe investing and one of three stewards of the firm. His job is more than just delivering financial returns: It requires grappling with how to keep Sequoia a top-tier firm when the venture industry faces more competition in the private markets. He may be non-fungible. But there’s still a broader existential question he and the venture industry face: Is a dollar just a dollar? The rise of players like Tiger Global in the industry has shown there’s an appetite from founders who are looking for hands-off investors. Less coach, more cash. “The biggest threat I see right now is that there’s money that doesn’t come with advice, and I really worry what that does to companies,” Botha said. Sequoia is a firm playing at the top of its game, thanks in part to Botha’s leadership, but now it’s his responsibility to keep it there. Not every firm has managed generational transitions, or been able to continue to pick the top companies. “He doesn’t want Sequoia to be the 10th best firm, or even the third,” said Sequoia partner Jess Lee. “The goal is to have industry-leading returns at every vintage across decades, and that is very difficult to pull off, but the results are there.” Botha may not be the type of venture firm leader to post salty memes on Twitter or run his mouth off on a podcast, but those who know him well caution others not to misinterpret his prim, composed exterior. There are many 109s at stake, and he wants to win them all. “He is incredibly competitive and loves to win, so it's not like there's not a full-on carnivore in there,” said Eventbrite CEO Julia Hartz. “It’s just on top of that, he has the ability to channel his energy and not let his ego become something that distracts him, or more frankly, gets into that destructive zone.” Facing the test Part of that drive comes from growing up in South Africa before moving to the U.S. in his late 20s. “There is a certain loneliness of being an immigrant that leaves you with no choice but to work to try to get somewhere,” he said. He could’ve stayed in South Africa, where he was one in a line of several well-known Roelof Bothas who worked in government and economics. His first job was as a door-to-door salesman for Golden Products, selling the local Tupperware equivalent the summer before college, something to push him out of his comfort zone. “It was awful,” he admitted. Much more in his wheelhouse were numbers. In college he studied actuarial science, economics and statistics, and became the youngest licensed actuary in South Africa’s history at 22. But instead of pursuing that work, Botha decided to join McKinsey for half the salary, with the hopes that it could be a springboard to living and working abroad. It was the first “crucible moment” in his professional life, a phrase that Botha and the Sequoia partners like to use for a serious trial with significant outcomes. Botha’s next trial came when he met Elon Musk. By 1998, Botha had enrolled at Stanford’s Graduate School of Business. That’s where Musk tried recruiting him to join PayPal’s finance team. Botha didn’t have the needed work authorization. Few people say no to Musk these days, but Botha said no to joining PayPal twice before a dip in South African rand depleted his savings. Needing to make April’s rent, he finagled his class schedule and joined PayPal in March 2000. “He was super young, like late 20s, and somehow he gave off this gravitas like no other GSB students did,” said PayPal co-founder Max Levchin. Part of it is Botha’s size and demeanor: He’s very tall, very serious and very smart. He’s also a stickler for punctuality. It’s a combination that can come off as intimidating, disguising a goofier side. “He’s always presented as like a 40-plus-year-old graybeard, ready to take a company public,” Levchin said, describing Botha’s inner self as more like a supercompetitive 13-year-old. When the CFO role at PayPal unexpectedly opened up, Botha raised his hand and said he wanted it. It was a battlefield promotion during a management mutiny, and he was thrown into the role with no C-suite experience. When PayPal decided to go public, outsiders questioned his credibility. ‘“He was called out over and over again by journalists and reporters and analysts, like ‘Hey, this dude is barely out of his diapers. What’s he doing being on Wall Street?’” Levchin recalled. “It was controversial.” Internally though, no one questioned that Botha could do it. At 28, he took the company public, then soon after, helped negotiate its sale to eBay in 2002. Its CEO, Meg Whitman, wanted him to stay with the company, offering a big title and a pretty large option package — which was notable, given how fiercely eBay and PayPal had competed. Sequoia’s Michael Moritz, who’d backed PayPal and served on its board, came in with a different offer: Join the firm as a partner. It wasn’t the richest deal: He wouldn’t initially get carry, the lucrative profit-sharing that makes VCs wealthy, but Sequoia would at least match eBay’s salary. It was his third crucible moment, and Botha chose Sequoia. Joining Sequoia was Botha’s third “crucible moment” in his professional career. Leaving South Africa and joining PayPal were the first two. Photo: Smith Collection/Gado/Getty Images Striking gold, then striking out After working nonstop at PayPal, the transition into venture wasn’t an easy one. In 2003, it was still a soft year with many venture firms underwater on their dot-com investments, Botha recalled. His big break came with YouTube, one of the first deals he led. He met the founders through his PayPal connections when it was just a team of three people. It was one of the first unicorns, before anyone even used that term, said Gideon Yu, its former CFO. You’d expect a young VC to be eager to strike a deal when Google came knocking, as it did for YouTube. But Botha wasn’t interested in selling YouTube quickly with a high price to get a win on the board, Yu recalled. Instead, he insisted on a deal that would set up the company for long-term success. “With some folks, emotions and bright, shiny objects will tend to distract you in situations like this. With Roelof, there’s always a very strong foundation and a very true north,” Yu said. After working with other investors, Yu came to realize that Botha’s approach put him in the “top echelon” of VCs. YouTube ended up selling to Google for $1.65 billion in October 2006. It instantly catapulted Botha’s credibility and visibility, “but then, right after that, I looked at the rest of my portfolio and it wasn’t nearly as good,” he recalled. Money-transfer startup Xoom, the first investment he’d helped lead, was struggling. He missed Twitter and said no to the CFO job at Facebook, thinking he could instead get Sequoia to invest. (The role went to Yu, and Sequoia didn’t get the deal.) Then, the 2008 financial crisis hit, and 2009 looked pretty bleak. Sequoia founder Don Valentine had warned Botha in the interview process that he hadn’t failed enough in his career. Successful people join venture capital, only to have to face the fact that good investing means taking risks in startups that are more likely than not to fail. “Coming to grips with being wrong, not 5% of the time, but 30% of the time, 40% of the time, really eats at your self-confidence, honestly,” Botha said. There were a lot of regrets at this point, he remembered. “I nearly quit the business.” Michael Arrington, Botha, Paul Graham, Keith Rabois and Craig Bramscher spoke during TechCrunch Disrupt in 2011. Photo: Joe Corrigan/Getty Images for AOL Out of the ‘valley of despair’ Perhaps it was the pesto that saved him. Botha cracked a small smile as he thought back on it a decade later. Sequoia partner Doug Leone had grown basil in his garden and brought him a container of homemade sauce one weekend. “It’s a small thing in the grand scheme of things, but it made a difference,” he said. It wasn’t just the pesto, of course — it was the personal gesture and the counsel Leone delivered with it that made Botha feel like he had a team behind him. He’s now on the other side; he sees a lot of investors go through a similar “valley of despair” a couple years in. Part of his job now, running the firm, is to recognize when the new generation of Sequoia partners similarly hit that place and be there for them — although in Botha’s case, he makes homemade biltong, a South African snack similar to beef jerky that uses salt, pepper, vinegar and coriander. When Botha entered that dark valley, partners like Moritz, Leone and Jim Goetz rallied around him, “giving me enough rope that I had to figure it out on my own, but providing enough guardrails that I didn’t go off course.” It was the advice he needed from his partners to get him back on track. In 2009, Botha discovered Unity and Eventbrite. The next year, he invested in MongoDB and then finally got a chance to invest in Square in 2011. They would all become publicly traded companies, part of his nine career IPOs. Botha had some high-profile flops too. Whisper never became the next Instagram. Video API TokBox sold for less than it raised. Jawbone became one of the costliest VC failures ever. Botha may not be as outspoken or high-profile as other venture capitalists, but he prefers it that way, giving credit for everything from the scouts program to the Sequoia Fund to his whole team. Photo: Steve Jennings/Getty Images for TechCrunch “That's part of the beauty of this business. Even though you could make big mistakes, there's another at bat tomorrow, because people are starting interesting new companies,” Botha said. “So if you're willing to swallow your disappointment, buckle up, get back on the bicycle, get back on the horse, get back on your skis — whichever thing it is that you can identify with – you just try again.” What’s interesting to Botha at the moment always varies. Unlike a lot of VCs who will end up specializing in a subsector, Botha is a true polymath who invests across consumer, enterprise and health care, said Sequoia’s Lee. It’s more than just having the smarts and studying up on it. Botha has the “dream gene” of being able to sit down with founders and imagine a market that could be much bigger, Lee said. “When Unity started, it was this little gaming thing and nobody knew that mobile gaming and AR and VR and 3D was going to be that huge, but he was able to dream with the founder around that taking off, and now it’s a huge public company,” she said. After 23andMe CEO Anne Wojcicki met with Botha, he sent her a thoughtful note. Sequoia led a $250 million growth round in the DNA-testing company. “He’s really supportive and he’s really constructive, and I think it goes against the reputation of some VCs,” she said. Phil Libin, the former Evernote CEO, heavily leans on that side of Botha to build out his videoconferencing app, mmhmm. Botha was one of Libin’s first calls when he started mmhmm, although that might seem unexpected. Botha had invested early and was on the board of Evernote when Libin moved to step down as CEO, a process he initiated but then “lost control of.” “He always did what was right for the company. He was acting in good faith, and he went above and beyond to make sure that I was treated fairly and with respect through it,” Libin said. Because of that, now the two have a standing weekly meeting to discuss product and strategy for mmhmm. Libin considers Botha practically a co-founder, although Botha would never want to take the credit. “Phil mentions to me that he feels about me that way. I really appreciate it. I would never repeat it myself,” Botha said. The steward While plenty of VCs would find a way to humblebrag about the role they had in helping a company in its earliest days, Botha’s style has always been understated. 23andMe’s Wojcicki considers him “Obama-like” for his intellect and integrity. “There's a couple of people I know in life who are like, above and beyond,” said Wojcicki, and Botha’s one of them. His natural leadership within the firm was apparent early on. “To walk into that partner meeting, it was clear to see that he was in fact a leader. It’s not surprising to see the leadership role that he ultimately formally ended up taking in the firm,” said Yu, the ex-YouTube CFO. In 2009, Botha launched a scouts program as a way for the firm to expand the network of startups it was hearing about — a move rivals soon copied — and started co-leading the firm’s U.S. investing operations alongside Goetz. After Moritz stepped down in 2012, Goetz picked up the mantle of “steward” of the firm, but passed it to Botha in 2017 when he stepped aside. It’s a complicated power dynamic inside a classically team-oriented firm. In deal meetings, Botha isn’t the one in charge or the one to ultimately greenlight deals. When it comes to running the firm though, Botha is one of three stewards, alongside Leone and Sequoia China’s Neil Shen, who are in charge. (Botha, who has a literary bent and often recounts stories, cites George Orwell’s “Animal Farm” line as explanation: “All animals are equal, but some animals are more equal than others.”) Botha’s name was on the Sequoia Capital Fund announcement , a highly visible sign to outsiders of his rise within the firm, but he only reluctantly acknowledged he was a driving force behind the change. “It's very dangerous for us internally to attribute any activity we do to just one individual,” he said. Even so, the idea for the Sequoia Capital Fund came from running the numbers. Something Botha had kept a close eye on over the years was the “as-held values,” or, what was the actual value Sequoia had distributed to LPs versus what would have happened if Sequoia held on to it. It’s a good measure in part because you don’t want to distribute companies that are about to fall off a cliff to LPs, Botha said. But it disappointed him that the fund had to distribute shares so early to LPs when, if they’d had a chance to hold on, they could’ve seen even higher returns. The new fund pools together LP money into a larger portfolio of publicly traded companies. The Sequoia Capital Fund then feeds a group of more traditional venture sub-funds, which return their proceeds — including shares of publicly traded companies, earned through IPOs, acquisitions or other deals — back into the main fund. Sequoia’s LPs have signed off on the idea, electing to roll over 95% of eligible balances to the new fund. After a two-year lockup, limited partners will be able to request to redeem some of their holdings twice a year. The Sequoia Capital Fund means Sequoia is giving up some of the advantages of being a VC firm (mostly lighter regulation) and becoming a registered investment adviser, allowing it to invest more of its cash in secondary offerings, crypto and perhaps other venture funds. The other reason to create an evergreen fund was this idea that VCs are expected to step off boards when a company goes public. That notion bothers Botha to his core. “What a lot of people underestimate is how much company-building still happens at every stage,” he said. “Even when a company's public and you think it's mature, there's so much more innovation that can happen.” The challenge for Botha is to do the same for Sequoia, which turns 50 this year. Few firms have made it that far, let alone while delivering consistently high returns. LPs may be loyal to Sequoia, but new generations of founders are harder to woo. There are plenty of entrepreneurs, including some Sequoia backed early on, choosing to tap investors who only bring money and don’t need the board seat. There’s also been a slow deflation in tech stocks, and already concerns are bubbling that late-stage valuations could fall too. That could be bad in the short term for companies looking to exit, but it could also prove some of Botha’s thesis that companies need support. And it might also show that the timing of the move to an evergreen fund, with which Sequoia can more easily wait out cycles, was eerily prescient. The last two years have smashed funding records and seen startup valuations soar, but Botha compared it to an open-book exam: Founders have it easy in go-go times, but when the final exam is suddenly book-closed, will they have learned enough to survive? The same goes for a new set of investors who have only had their companies marked up from round to round. “It's easy when things are up and to the right. I haven't seen a single story, personally, that was up and to the right the whole way. And so what happens when things go bad? I worry for that,” he said. His own story is proof of it. A rugby-playing salesman from South Africa is now a leader at one of the top-tier venture capital firms, but it took some help (and some pesto) to get there. And along the way, he learned a crucial lesson: Cash can dry up, but counsel is evergreen. From Your Site Articles

Michael Moritz Investments

3 Investments

Michael Moritz has made 3 investments. Their latest investment was in Professional Triathletes Organisation as part of their Unattributed VC on March 3, 2022.

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Michael Moritz Investments Activity

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Date

Round

Company

Amount

New?

Co-Investors

Sources

3/23/2022

Unattributed VC

Professional Triathletes Organisation

Yes

1

1/15/2020

Series A

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$99M

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10

11/7/2017

Series D

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$99M

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10

Date

3/23/2022

1/15/2020

11/7/2017

Round

Unattributed VC

Series A

Series D

Company

Professional Triathletes Organisation

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$99M

$99M

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Yes

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1

10

10

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