Sequoia's Michael Moritz on how he picks companies

http://www.mercurynews.com/ci_12531654

by ksvs • 17 years ago

27 11 17 years ago

qhoxie• 17 years ago

The interview is disappointingly light. Not that I was expecting to read a bunch of Sequoia's secrets, but given their previously good judgment in tough times, more specifics would have been nice.

stevenjames• 17 years ago

Another read (though, it discusses the "Talent Scouts" -- not just Moritz): http://www.sequoiacap.com/news/the-secrets-of-the-talent-sco...

ajju3• 17 years ago

Summary: The recession is acting as a great filter that keeps out non-passionate founders. Also, Sequoia does some of its best investments in recessions.

The interesting thing is that this recession is acting as a filter not just for founders but also for VCs. See WSJ's "VCs head for the door" [1]

My favorite part though was this line from Mr. Moritz:

"Oddly enough in recessionary times, customers are prepared to take more risk with a young company if they believe that that company offers them a tremendous advantage that will help them become more efficient or lower their costs."

I have one data point in support of this at my start up but would love to hear if y'all are seeing more.

[1] http://online.wsj.com/article/SB124416376153487535.html

jpwagner2• 17 years ago

I don't think I understand the significance of this statement. You always buy a product that 'offers a tremendous advantage that will help [you] become more efficient or lower [your] costs.'

Is the significance that in a recession a prospective customer is less likely to buy 'the standard'?

ajju3• 17 years ago

Yes, Moritz is suggesting that companies (at least some of them) are more willing to take the risk of buying from a stratup, if it offers them a tremendous advantage.., during a recession.

I am wondering if there are entrepreneurs who can corroborate this theory based on their experience.

jjs• 17 years ago

I think they're emphasizing "become more efficient or lower their costs" as opposed to growing the company, or increasing revenue.

zackattack• 17 years ago

What companies has Sequoia funded that haven't succeeded?

rfreytag• 17 years ago

Excellent question - is this survivors bias? We need the negative information to get a sense whether their technique works better than random luck applied to good times.

pclark• 17 years ago

I would have thought there'd be more startups looking for funding: "I can't get a job elsewhere so I'll start my own company."

Sequoia's Michael Moritz on how he picks companies

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