Why VC Firm Sequoia Broke With Tradition To Put Down Roots In Europe’s Startup Scene
Sequoia partners Matt Miller, left, and Doug Leone, third from left, have traveled to London regularly to hire Luciana Lixandru and George Mason in London this year, quarantine and flights in the event of a pandemic, etc. Sequoia Sequoia When Klarna co-founder Sebastian Siemiatkowski heard the talk from venture capital firm Sequoia ten years ago, […]

When Klarna co-founder Sebastian Siemiatkowski heard the talk from venture capital firm Sequoia ten years ago, he was "blown away." Here's a famous Silicon Valley investor behind Apple, Google, and YouTube visiting his payments startup in Stockholm - to sell it on their help. But Siematkowski didn't want to appear too easily courted. “If we're really the next Google, why isn't the whole partnership here? Why is it only you who stole? he asked Sequoia's partner in the room at the end of the meeting.

Klarna's CEO watched the investor get on the elevator. The door closed. Thirty seconds later, his phone rang. It was the billionaire frontman of Sequoia at the time, Michael Moritz. “He said: 'I am so sorry that I was unable to participate in the match,” recalls Siematkowski. "'If Sequoia is allowed to invest, I will be a member of the board.'" past september, Klarna reached a valuation of $ 10.65 billion, making it the most valued private start-up in Europe. Moritz is still a director of his board.

This emerging success - along with the recent IPO of the video game development platform Unity Software, $ 10.2 billion Evaluation for robotic process automation firm UiPath and more - help explain why today the well-known venture capital firm in the United States, China and elsewhere has finally planted European roots. What was once a passing destination is now the headquarters of Sequoia's first non-California office for its flagship venture capital funds, anchored by an investor Midas List Europe attracted to a big local rival and with plans to expand in 2021 .

With only three employees announced to date, Sequoia's London office is small. But its symbolism goes beyond its workforce, both for the company and for Europe's larger tech ecosystem. Business leader Doug Leone notes that in the 1980s Sequoia was known for a rule established by its early partners: if we can't cycle there, we won't invest. This position worked to find Apple. It is more and more likely that this will not be the case to find the next one. "We are not interested in Sequoia in a partnership with a company that is doing an IPO of $ 1 billion and which over 20 years goes to $ 2 billion," says Leone. “The interest is to find important market leaders. And more and more, we are starting to see them coming out of Europe.

Investors and entrepreneurs from European technology hubs have seen Sequoia investors in the field visit startups more in recent years, part of a larger trend US-based firms pursuing more aggressive deals on the continent and the UK When Atomico's partner, Hiro Tamura, a London-based investor, visited Germany the week before the lockdowns began Covid-19 in March, he heard a delegation of five Sequoia partners were there at the same time. Growth-focused Sequoia investor Matt Miller said the company typically holds 40 to 50 business meetings on a single trip.

But while Sequoia was able to work its way through hot Europe deals, it backed the apparent winners later than its partnership could have wished, meaning it wasn't getting such a high cash return. even if he bet well. An example: Graphcore, a British startup making chips for artificial intelligence use cases valued to about $ 2 billion today. Sequoia found the company immediately after completing its Series B financing round; CEO Nigel Toon says Miller convinced him to let Sequoia get ahead of his next round, a C Series, a few months later, thanks to the strength of Sequoia's founders network, which allowed him to rub shoulders with the CEO of Google Sundar Pichai, WhatsApp co-founder Jan Koum and Dropbox CEO Drew Houston.

Those just a few months have meant a difference in Graphcore's valuation, from around $ 60 million in pre-cash to $ 355 million, per data from the PitchBook starter tracker. “We hope to see these opportunities sooner,” says Miller. “And we need to be able to provide a lot more support for our initial investments.”

Luciana Lixandru, number 20 last year, is Sequoia's main European charge. Midas Europe List and a former Accel partner known for its early investments in UiPath, food delivery start-up Deliveroo, virtual events company Hopin, and visual collaboration software maker Miro. Sequoia met Lixandru through this deal (another he backed relatively late) and another shared investment, security startup Tessian. In March, the firm told him to rent; it started in September after a six-month non-competition period of "garden leave". A more junior investor, George Robson (Sequoia is one of many companies to call all of its investors “partners”, which is confusing), has since joined unicorn fintech Revolut. More recently, the firm added a third London-based employee: Chief Talent Zoe Jervier Hewitt, who worked in a similar role at EQT Ventures and will start in January 2021.

Sequoia also plans to add a third investor in the first quarter of next year; Miller, whose plans to move to Europe for a few months this year have been derailed by the pandemic, plans to spend the summer full-time in London in 2021. "Just kidding, we're the only ones signing a lease of office. and find office space while everyone abandons their desks, ”says Lixandru.

How has the European venture capital community, mainly gathered in London (Brexit aside), reacted to Sequoia's movements? Investors from other companies say the creation of Sequoia's store is hardly a surprise, but a validation point for an ecosystem that has seen the total amount of investment more than double to $ 43 billion in the year. over the past five years, according to Atomico's 2019 status. European Technology Report. “That's a good thing. We take this as an endorsement of what's going on,” says Haakon Overli, co-founder of Dawn Capital. At rival firm Index Ventures, which went in the opposite direction Opening offices in California after a decade of investing in Europe, Midas List investor Jan Hammer says Sequoia's move reflects the widest range of options European founders now face. "It's good to see their state of mind change, but we're surprised it took them so long!" Hammer wrote in an email.

Not everyone has rolled out the welcome mat. Lixandru's former company, Accel, is proud of itself unicorn plant in Europe. Sources familiar with his departure process say he was "emotional" and not as friendly as he has said publicly. Caught a little in the middle was Daniel Dines, UiPath co-founder and billionaire CEO, who took money from both companies and says he's on good terms with both. “The people at Accel were a little upset. But I understand Sequoia's choice and I understand her choice, ”says Dines. “This is the opportunity to build the European subsidiary of Sequoia. I think it's very difficult to go through.

For this decision to bear fruit for Sequoia, the company will have to manage the integration of its European team with the United States at eight o'clock, because - more like Index and unlike Accel - Sequoia's partners in London and California will invest. in the same fund. The firm's thinking: European and US companies are more likely to compete earlier as markets increasingly overlap, says Leone, unlike China, India or Southeast Asia, where the company operates. independent funds. (Leone says Sequoia has no plans to open similar offices in New York or Latin America.)

That's where the risk lies: that Sequoia's London office will be slowed down by the need for a Sand Hill Road deal on deals, or never fully integrate as a satellite office. But the entrepreneurs and investors who spoke Forbes argue that out of any business, Sequoia has earned the benefit of the doubt to figure it out. “My reaction was 'finally',” says Unity co-founder and former CEO David Helgason, now an angel investor in Copenhagen. "There is something about being near a place that makes it easier for you to understand it than if you just connect with people on Skype."

The biggest problem founders and small owners have is that they’re experts in their field and novices in what it really takes to effectively run a . That’s what usually trips them up, sooner or later.

Don’t let that happen to you. Admit that you don’t know what you don’t know about , starting with these 15 tips guaranteed to help keep you and your company out of hot water. Some are straightforward, others are counterintuitive, but they’re all true. And some day they’ll save your butt.

Always make sure there is and will be enough cash in the bank. Period. The most common business-failure mode, hands down, is running out of cash. If you know you’ve got a cash flow or liquidity problem coming up, fix it now. You can’t fire bad employees fast enough. You just can’t. Just make sure you know they’re the problem, not you ( see next tip ).

The problem is probably you. When I was a young directeur, my company sent us all to a week of quality training where the most important concept we learned was that percent of all problems are management problems. When things aren’t going well, the first place to look for answers is in the mirror.

Take care of your stars. This goes for every company, big and small. The cost of losing a star employee is enormous, yet business leaders rarely take the time to ensure their top performers are properly motivated, challenged, and compensated. Your people are not your kids, your personal assistants, or your shrink. If you use and abuse them that way, you will come to regret it. Capiche ?

Learn to say ' yes ' and ' no ' a lot. The two most important words owners and founders have at their disposal are “yes” and “no. ” Learn to say them a lot. And that means being decisive. The most important reason to focus – to be clear on what your company does – is to be clear on all the things it doesn’t do.

It boggles my mind how little most créateurs d'entreprise value their customers when, not only are their feedback and input among the most critical information they will ever learn, but their repeat business is the easiest business to get. Learn two words : meritocracy and nepotism. The first is how you run an organization – by recognizing, rewarding, and compensating based solely on ability and achievement. The deuxième is how you don’t run an organization – by playing favorites and being biased.

Know when and when not to be translucide. Transparency is as detrimental at some times as it is beneficial at others. There are times to share openly and times to zip it. You need to know when and with whom to do one versus the other. It comes with experience.

Trust your gut. This phrase is often repeated but rarely understood. It means that your own instincts are an extremely valuable decision-making tool. Too often we end up saying in retrospect and with regret, “Damn, I knew that was a bad idea. ” But the key is to know how to access your instincts. Just sit, be quiet, and listen to yourself.

Protect and defend your intellectual property. Most of you don’t know the difference between a copyright, trademark, trade secret, and patent. That’s not acceptable. If you don’t protect and defend your IP, you will lose your only competitive advantage.

Learn to read and write effective agreements. You know the expression “good fences make good neighbors ? ” It’s the same in . The more effective your agreements are, the better your relationships will be.

Far too many créateurs d'entreprise run their business like an extension of their personal finances. Bad idea. Very bad idea. Construct the right business entity and keep it separate from your personal life. Know your finances inside and out. If you don’t know your revenues, expenses, capital requirements, profits ( gross and net ), debt, cash flow, and effective tax rate – among other things – you’re asking for dysfonctionnement. Big dysfonctionnement.

You don’t know what you don’t know. Humility is a powerful trait for précurseurs, and that goes for new business owners, veteran CEOs of Fortune 500 companies, and everyone in between. More times than not, you will come to regret thinking you knew all the answers. Behind every failed company are dysfunctional, delusional, or incompetent précurseurs. The irony is, none of them had the slightest idea that was true at the time. Even sadder, most of them still don’t. Don’t end up like one of them.

For every success you have in growing your market share, another business or other businesses will inevitably lose ground. Here are 11 quick and easy tips to gain a competitive advantage over your rivals and insulate yourself from the threat of new entrants in the market.

Of course, we all want to spark business growth and increase revenue. But the way you do this in a sustainable way is to focus instead on the building of a loyal database of avid fans. Content digital, paired with optimized website forms and intelligent fax automation follow-up is critical to business success. This approach builds trust by giving away free value before asking for someone’s hard-earned money. Not an spécialiste in creating optimized lead generation pages on a website ? No worries, use a trusted tool like Leadpages to make it happen.

Like it or not, folks out there aren’t searching for your brand, they’re just looking to solve a problem or find a particular type of product ( unless you run Starbucks or Adidas ! ) Don’t list all the benefits your product brings. Focus on the solutions. Explain to the customer in simple, straightforward terms how or why your product can help them or assist in the attainment of their goals. Consider FedEx’s iconic slogan : When it absolutely, positively has to be there overnight. This was a clear example of addressing widely-spread anxiety about the reliability of delivery services. Run through some market research to profile your target customer. How does your product or service – and your delivery and and price point – solve other people’s problems and make their lives easier or more pleasurable ?

Dropping prices doesn’t necessarily raise sales, for instance ( though it will definitely squeeze margins ). If you position yourself as a de haute gamme brand, then your customers aren’t necessarily value-driven in the first place, and cutting prices could even tarnish your brand. Consider this case study from Robert Cialdini’s seminal book ‘Influence : The Psychology of Persuasion’ : a jeweller sold out of turquoise jewelry after accidentally doubling, instead of halving, the price. The inflated price tag lent the product an unwarranted cachet ! If you are a premium brand, there are ways to optimize your pricing without lowering prices. For example, offer the quality-conscious customer an ‘exclusive’ benefit that your rivals do not or cannot provide. If you are at the value-driven end of the market, on the other hand, don’t assume slashing prices means incurring a loss. Low pricing can help you rapidly onboard a heap of new customers who may also buy other items in your shop and return again. Context also counts for a lot with pricing. The best way to sell a $5, 000 watch, for instance, could be by putting it next to a $10, 000 watch. Think strategically when it comes to deciding any price point.

Yes, it sounds obvious, but it’s so very important ! Whether consciously or not, people are more likely to buy a product if they like the sales assistant who’s attending to them. While the employee’s personality obviously has no bearing on the price or your product’s ability to serve their needs is irrelevant. Friendly customer-facing staff will always attract more sales. Be rigorous in hiring people who are genuinely cheerful, friendly and outgoing. Make sure your training program teaches them to adopt a consistently friendly approach that puts customers at ease and feel like a priority.

Say you’re a bricks-and-mortar store and you’re getting a rush of customers as closing time approaches… why not close up an hour later ? While this may cause disgruntlement among équipe, solve this venant by getting creative with rosters. Monitor customer footfall throughout the day and week to identify your busiest periods, and équipe people accordingly. You can also reduce headcount during quieter periods to offset the higher costs and longer sérieux hours created by your extended opening hours. It’s a win-win !

Even in the web age, some customers will always prefer to contact you by phone rather than courier or Facebook. While many online companies with tight margins eschew manned phone lines altogether, it’s worth giving customers the option of having a voice-to-voice conversation with your brand. By all means, slash the time and cost spent responding to queries by funnelling customers to standardized, pre-existing responses on your webpage ( i. e., FAQs ). But if their query isn’t listed in the drop-down menu of FAQs, then don’t make them click more than once more to find your phone number. Put it front and center on your web page, particularly if you’re a retail offering. ‘Live chat’ bots are an inexpensive way of offering real-time communication, too.

Why not give your happy customers a voucher with their purchase to redeem on your products and services ? If they love what you do already, they’re only going to love you more for this. It’s good for you because : It guarantees they will return to your store again. People hate to waste freebies ! When they return to your store to redeem their voucher, they may buy other items, too. If your operates online, then the freebie could be strategically timed to coincide with a special sale. Oh, and guess what ? Chances are customers who have received vouchers or freebies won’t stay quiet about it either, so you could enjoy some positive buzz on social media.

Local businesses can arguably connect with their unique communities with much greater authority than any global chain. A local retailer, hair salon or gardening company can sponsor a kid’s sports team and offer deep discounts for OAPs at the same time. Some cinemas feature special ‘sensory’ screenings where parents can bring kids with autism ( who would normally be overwhelmed by busy, noisy environments ) to enjoy a movie in a relaxed, stress-free atmosphere. This reflects well on them and also guarantees them a loyal customer niche. Whatever you choose to do to support your community, make sure it authentically fits with your brand offering and journey to date.

Social media is a great medium through which to build a solid relationship with customers – just don’t forget what ‘social’ actually means ! Soul-less corporate shop-talk won’t work on Twitter. Try to give your brand some ‘personality’ when you write updates or posts. This can bring its own risks, oui. But if you get it right, the benefits can be très grande. Develop a tone of voice that aligns well with your brand identity. Seek to inform, help, entertain or amuse. And most importantly – given the dire PR consequences – don’t patronize, try too to be funny, or tweet after a few alcoholic drinks !

Sometimes it’s better to be a master of one discipline than a jack of all trades. Admittedly, multiple revenue streams do spread your risk : if one falters, others can take up the slack. Nevertheless, consumers often associate ‘specialists’ with higher quality products or services than generalists. And with good reason, too : specialists typically invest all their resources into perfecting a single product or service. So what should you specialize in ? to state the obvious, it should be something in which you excel. You could also pick something with rising or recession-proof demand which is resilient to technological change in which you possess a competitive advantage over your rivals or where there’s an obvious gap in your local market. Own it, whatever you do.

Don’t ever get too satisfied with your . You can always improve – and improve you must ! Don’t get me wrong : without the odd moment of smug satisfaction, what’s the point ? Do relish in the successful launch of a game-changing product or take pleasure in positive customer feedback. But don’t let your customers hear you banging on about it time after time ! Be alert to the common element that has led to the downfall of countless hitherto thriving brands : complacency. Imaginative, nimble and innovative start-ups often do better than big market leaders that just got lazy. You may be the disruptive innovator today, but tomorrow you could be the complacent market leader with a tired model. So try to be humble and always strive to improve. Seek inspiration from other fondateurs, from books and from seminars. The moment you think ‘mission accomplished’ is the same moment you become vulnerable to being usurped.

There are lots of ways in which you can improve your business, and not all of them are complicated ! Try out the above business tips or integrate them with your existing strategies, and let me know how you go in the comments below. Guest Author : Faye Ferris is responsible for the day-to-day management of the Dynamis APAC Pty Ltd offices in Sydney. She develops the DYNAMIS durable of brands and their expansion into the Asia Pacific region as well as BusinessesForSale. com, FranchiseSales. com and PropertySales. com. If you have an interest in partnering up with Faye or advertising on any of these websites in the APAC territories, please do not hesitate to contact her on faye@businessesforsale. com.


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