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20VC: Sequoia's Pat Grady on What Sequoia Is Focused On Today, How Sequoia Think About Investment Decision-Making Processes & Why It Is Important To Trade A Few Points of Efficiency for Culture When It Comes To Attribution

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Jul 1, 2019

Pat Grady, a Partner at Sequoia Capital, shares insights from his journey to one of the top venture firms. He discusses Sequoia's current focus and the critical balance between efficiency and company culture. Pat emphasizes the importance of partnerships over mere investment choices and outlines their unique decision-making process. He also dives into the evolving dynamics of venture capital, highlighting the significance of long-term relationships and adapting to challenges in today's fundraising landscape.

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ANECDOTE

Freddie's Rigor

Frederick, CEO of Okta, known for his rigorous process, sent daily emails to Pat Grady during their investment discussions.
He even issued RFPs for his wedding vendors.

INSIGHT

Founder-Centric Approach

Sequoia focuses on founder quality above all else, accepting most risks except founder risk.
Great founders can overcome challenges, making market price a secondary concern.

ADVICE

Compressed Timelines

Build relationships with investors before fundraising to assess long-term partnership potential.
Focus on the partner, not just the term sheet, as the partner relationship lasts much longer.

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Pat Grady is a Partner @ Sequoia, one of the world's leading and most renowned venture firms with a portfolio including WhatsApp, Zoom, Stripe, Airbnb, Github and many more incredible companies. As for Pat, at Sequoia he co-leads the firms growth investment team and has been involved with some of the true greats, Hubspot, Zoom, Okta, Qualtrics, the list goes on. Prior to Sequoia Pat spent three years with Summit Partners.

In Today's Episode You Will Learn:

1.) How Pat made his way from Summit Partners to co-leading Sequoia's growth investment team? Was it intimidating for Pat entering a partnership with Jim Goetz, Don Valentine, Roelof Botha? How did he manage those nerves?

2.) So many different funds and activities, so what is Sequoia focused on today? Where does Sequoia think about their ideal insertion point today? How do they see the deployment of their blended capital across rounds? Does Pat believe in ownership on first check or building ownership over time? How does Pat think about the extended window of privatisation with IPOs being continuously delayed?

3.) Does Pat believe that VC really is a team sport today? Does Pat agree with Josh Kopelman's statement, "I would rather be a better picker of partners than investments"? What are the core requirements, skills and traits that Sequoia looks for when adding to their partnership?

4.) What is the investment decision-making process at Sequoia? How do they feel about unanimity vs conviction based investment decisions? What are the pros and cons of each? What does Pat believe is the most non-obvious investment decision that Sequoia have made? Sequoia run an incredibly rigorous process when investing, how does Pat balance between that level of rigour with the speed to win the deal?

5.) What advice would Pat give to someone that has just gained their first institutional board? What does Pat know now that he wishes he had known when he started in VC? How does Pat think about time allocation across the portfolio? Concentrate on winners or the strugglers are where your reputation is built? Leading Sequoia Growth and with a beautiful family, how does Pat approach work/life balance?

Items Mentioned In Today's Show:

Pat's Fave Book: God Friended Me

Pat's Most Recent Investment: Embark: Revolutionizing Commercial Transport

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