The article discusses the changes made by Sequoia Capital, a prominent venture capital firm, to its business model. Specifically, it has created a permanent capital fund that will allow its limited partners (LPs) to benefit from both private and public market returns. This move is seen as a significant shift in the venture capital industry, as most VCs have traditionally operated on a rolling basis, with funds typically lasting 10 years.
The article cites interviews with representatives from other VC firms, including Molten Ventures and Forward Partners, who comment on the implications of Sequoia’s decision. They note that while the move may not be directly comparable to going public, it does open up access to venture capital for a wider range of investors, particularly those without the time or scale to invest in traditional VC structures.
The article also discusses the potential for other US-based VCs to follow in Sequoia’s footsteps. While some experts believe that only top-performing funds with strong LP relationships will be able to make this transition, others argue that it may become more accessible as the industry evolves.
Key points from the article include:
- Sequoia Capital has created a permanent capital fund that allows its LPs to benefit from both private and public market returns.
- This move is seen as a significant shift in the venture capital industry, potentially opening up access to venture capital for a wider range of investors.
- Other US-based VCs may follow in Sequoia’s footsteps, but only top-performing funds with strong LP relationships are likely to succeed.
- The transition from rolling funds to permanent capital will require significant changes in the way VCs operate and manage their investments.
Overall, the article highlights the growing trend towards more flexible and accessible investment options in the venture capital industry.
