When news broke this week that Roelof Botha was in the top job at Sequoia Capital, it was accompanied by the low-key inevitability that has become the hallmark of what is considered by many to be the leading capital firm – Silicon Valley risk.
That the 48-year-old South African, who was already the head of Sequoia’s US and European funds, also assumed global leadership came as no surprise. The formal decision between the partners was made in 30 minutes, said Doug Leone, the outgoing chef.
But for Silicon Valley Kremlinologists, there was still plenty to ruminate on. Botha was named Sequoia’s “senior steward”, dropping the “global managing partner” title that always accompanied the position.
Leone called the change a mere “tidy up,” but another insider confirmed it’s a sign that, behind the scenes, Sequoia has adjusted to a new global balance of power. These days, the people managing Sequoia’s new funds in other regions have equal status, especially in China, where local chief Neil Shen has made Sequoia the country’s top venture capitalist, which earned him recognition as the only other “steward” of the company.
Botha will have explicit responsibility for global operations such as finance and compliance. But when it comes to the most important investment and personnel decisions, Silicon Valley no longer decides.
Botha, like the company he runs, projects an air of self-effacing competence. At a time when Twitter has become a place for star venture capitalists to tout their expertise and settle scores, it affects the kind of old-fashioned probity you might expect from a corporate banker.
The grandson of Roelof “Pik” Botha, the last foreign minister under South Africa’s apartheid regime and later a member of Nelson Mandela’s first government, Botha says he always “felt the burden of waiting to live up to his name”. After earning the highest grades in her province for her high school finals, Botha says she heard people speculate whether the results were rigged.
The sting is still there. “I was driven to prove that I could do it on my own, and I never had to live in anyone else’s shadow,” he said.
Talk to people who know him and they’ll probably mention his humility. He has a suppressed laugh that he uses to deflect too much personal attention. But it masks fierce competition.
Unprompted, he mentions that he came top of his undergraduate university class in South Africa “with the best grades in history”, set an early career record as “the most young actuary in the history of the country”, and came out on top. in his class at Stanford University’s Graduate School of Business. “I’m pretty sure my grandfather didn’t contribute to my grades to be valedictorian.”
Botha decided to leave South Africa when he left high school, fearing that the end of apartheid would lead to political chaos and even civil war. Becoming an actuary, with a recognized qualification in the UK, was like an insurance scheme.
In fact, he spent two years at McKinsey before moving to California to study at Stanford, never looking back. Elon Musk sued him to join PayPal and he signed on as head of business development in 2000, before becoming chief financial officer a year later. A year later PayPal was sold to eBay and soon after Botha joined Sequoia.
Entrepreneurs who have worked with Botha cite his financial and strategic acumen as valuable assets for start-ups that often lack both. Sarah Friar, former chief financial officer of the financial company Square, underlines her “intellectual power”. Phil Libin, former CEO of Evernote, praises its “pattern recognition” – experience gained from years of study at different companies
Behind the scenes, Botha is clearly not averse to exercising more direct influence. He claims to have been instrumental in the decision of Square, recently renamed Block, to enter consumer credit. Its Cash application now claims 44 million users.
When the situation calls for it, he’s also willing to help sideline founders to make way for more professional management — a difficult balancing act in Silicon Valley, where venture capitalists compete for consideration. as the most favorable to the founders.
“When these things happen, it is with consent and agreement that it is in the interest of the company,” he insists. “This is not a coup.”
Some of Botha’s most notable investments came early, though the returns weren’t as spectacular as they could have been. They included YouTube, which sold to Google for $1.65 billion, and Instagram, which was bought by Facebook for $715 million.
Along with PayPal, which was acquired by eBay for $1.5 billion, Botha says those deals taught a “painful lesson” in selling out too soon. He adds: “I would say that in hindsight, the three would have been better off as independent companies.”
So it’s no surprise that Sequoia nowadays sometimes sits on the stocks of companies it backed long after they went public (it puts its public stock holdings at $45 billion at the end of the year). last year.) Botha was also the mastermind behind a plan last year to create a more permanent structure to house the company’s capital, thereby eliminating the need to sell when its funds expire.
Such tweaks could suggest that Sequoia is on the brink of deeper change, especially as the flood of money surging into Silicon Valley and the incursion of outsiders like SoftBank and Tiger Global have brought new competition to the venture capital industry.
Botha, however, suggests that Sequoia will stick with the more gradual evolution that has seen it through previous technology and financial cycles.
He is quick to dismiss any suggestion that the company is considering going public, as other private equity firms have done. “Where possible, within the confines of the law, we have structured ourselves to be a partnership in perpetuity,” he says.
He also rejects the idea that Sequoia is transforming into a different kind of financial institution — perhaps one to rival Wall Street’s investment banks — as it seeks to play a more sustainable role in people’s lives. businesses she helped create. Instead, he anchors him firmly in the start-up world he hails from – though he hopes to stay close to the entrepreneurs he has backed for much longer.