“We were so excited to meet with them,” said David Rusenko, co-founder of web-hosting service Weebly, recalling his early interactions with Sequoia before the firm invested in his company three years ago. Today, it is involved with many of the hottest startups, including accommodation service Airbnb, file-sharing service Dropbox, invitation service Eventbrite, and stereo and bluetooth headset maker Jawbone. As most others of the earlier generation faded from the scene, Sequoia held its own, going on to fund companies including Apple Inc, Oracle Corp, Paypal and Google Inc. Launched in 1972 by Don Valentine, a founder of National Semiconductor, Sequoia was one of the nation’s earliest venture-capital firms. The biggest venture investor in Facebook, Accel Partners, held $7.64 billion worth of Facebook shares at the time of that company’s 2012 initial public offering (IPO).

Sequoia also backed photo-sharing service Instagram, which Facebook bought in 2012 for $1.01 billion. Sequoia, which invested $60 million and made around $3 billion from WhatsApp, according to a source familiar with the situation, has squeezed a considerable sum out of Facebook, even if it never did invest in the social-media behemoth. Its big wins take on particular significance in an era when venture firms must beat back challenges from individual investors known as “angels” and crowdfunding, new technology that makes early-stage investments less crucial than they once were, and critics who say that venture capital investments aren’t worth the trouble.įacebook announced the acquisition deal on Thursday, astounding many with the price it paid for the service, which has 450 million users and is growing at 1 million a day.

In a business where top firms come and go, Sequoia has proved remarkably tenacious.

“This would make a lot more founders want to work with Jim Goetz,” said Sam Altman, a partner at Y Combinator, a program for startup companies whose previous startup was backed by Sequoia. With the sale of its protégé company message service WhatsApp to Zuckerberg’s Facebook for $19 billion, Sequoia found a way to make money from Facebook as well as solidifying its position as a titan of venture capital.Īnd it establishes partner Jim Goetz, who landed the deal, as one of Silicon Valley’s top rainmakers. But now, Sequoia is getting the last laugh. The discussion never got serious and Sequoia never invested in Facebook.

Jim Goetz of Sequoia Capital speaks on stage during TechCrunch Disrupt SF 2012 at the San Francisco Design Center Concourse in San Francisco, California September 12, 2012.

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