Doug Leone

Don turned Sequoia in his own way to Mike Ritz and me. We have never managed a fund. Everything is up and to the right. Suddenly, these non-companies go public in 1999. There is the stocks that we either hold on or we distribute, that we hold personally. Everything else goes to zero. These gains are not real, but in the meantime, we have paid ourselves stocks that at some point had value.

Don turned Sequoia in his own way to Mike Ritz and me. We have never managed a fund. Everything is up and to the right. Suddenly, these non-companies go public in 1999. There is the stocks that we either hold on or we distribute, that we hold personally. Everything else goes to zero. These gains are not real, but in the meantime, we have paid ourselves stocks that at some point had value.

value that was real, the millions of dollars. Well, those go to zero. There's no money in the bank. And because we distributed money at some point, now we have money back into the funds. So I remember looking one night and I said, I am in a hole from a net worth standpoint to real money in the many millions of dollars, meaning I was negative. I was broke. So were all the other folks.

value that was real, the millions of dollars. Well, those go to zero. There's no money in the bank. And because we distributed money at some point, now we have money back into the funds. So I remember looking one night and I said, I am in a hole from a net worth standpoint to real money in the many millions of dollars, meaning I was negative. I was broke. So were all the other folks.

We didn't panic. We started to have evening things and we said, what's the right thing? And the right thing is to completely cut our carry, completely cut our fees, writing checks, personal checks to the individual investors because we had to now recycle fees, but the individual investors weren't paying fees. There was no money for them to recycle.

We didn't panic. We started to have evening things and we said, what's the right thing? And the right thing is to completely cut our carry, completely cut our fees, writing checks, personal checks to the individual investors because we had to now recycle fees, but the individual investors weren't paying fees. There was no money for them to recycle.

How do you make them whole even if you make future investment? They can't participate. So we wrote checks and we made everybody, can you believe it? We wrote like a hundred checks. Nobody was going to lose money at Sequoia Camp from our personal accounts. And then we took what little gains we were going to have and all the fees, and we said, those fees are not ours anymore.

How do you make them whole even if you make future investment? They can't participate. So we wrote checks and we made everybody, can you believe it? We wrote like a hundred checks. Nobody was going to lose money at Sequoia Camp from our personal accounts. And then we took what little gains we were going to have and all the fees, and we said, those fees are not ours anymore.

We're going to reinvest them and reinvest them and reinvest them on behalf of our nonprofits, limited partners. And we turned 0.3x funds, 0.3, meaning if a fund is $300 million, it's not worth $90 million. And we turned them to 1.9x and 1.5x fund because we refused to give up, because we gave a shit. In a world where every other venture firm started using the words, these are the mulligan funds.

We're going to reinvest them and reinvest them and reinvest them on behalf of our nonprofits, limited partners. And we turned 0.3x funds, 0.3, meaning if a fund is $300 million, it's not worth $90 million. And we turned them to 1.9x and 1.5x fund because we refused to give up, because we gave a shit. In a world where every other venture firm started using the words, these are the mulligan funds.

If you play golf, what mulligan is, is your first golf shot. That's no good. You do a do-over. This is a do-over fund. We're just going to forget about 1999. And we didn't. And I say it again, that might be my proudest moment at Sequoia. That deserves a chapter in a Sequoia book. You learn most in misery. You want to talk about united, at night, how to do that.

If you play golf, what mulligan is, is your first golf shot. That's no good. You do a do-over. This is a do-over fund. We're just going to forget about 1999. And we didn't. And I say it again, that might be my proudest moment at Sequoia. That deserves a chapter in a Sequoia book. You learn most in misery. You want to talk about united, at night, how to do that.

Mike really took the leadership on that. Mike was a senior. I was a little younger. He was a partner a couple of years beforehand. And I watched. I watched the calm hand. I watched the long-term strategy and I learned. And we worked as a team, don't get me wrong. I also had a lot of companies and boards I know have money, but we got it done. And I'm incredibly proud of that.

Mike really took the leadership on that. Mike was a senior. I was a little younger. He was a partner a couple of years beforehand. And I watched. I watched the calm hand. I watched the long-term strategy and I learned. And we worked as a team, don't get me wrong. I also had a lot of companies and boards I know have money, but we got it done. And I'm incredibly proud of that.

I wish I could tell you it was one company. It was all the partners contributing a few gains. We would take a company public or sell it and we wouldn't take any carry. and we would just reinvest everything. So for the next 10 years, even though we were investing in new funds, we took a little piece.

I wish I could tell you it was one company. It was all the partners contributing a few gains. We would take a company public or sell it and we wouldn't take any carry. and we would just reinvest everything. So for the next 10 years, even though we were investing in new funds, we took a little piece.

And we told the new funds LPs, yeah, we're taking a little piece of yours to put back in the old funds, but one day you may be caught in that. And it would be nice that you're in business with partners that care a lot enough so that investors not only never lose money, but make money. They were completely supportive of that because they knew one day the shoe might be in the other foot.

And we told the new funds LPs, yeah, we're taking a little piece of yours to put back in the old funds, but one day you may be caught in that. And it would be nice that you're in business with partners that care a lot enough so that investors not only never lose money, but make money. They were completely supportive of that because they knew one day the shoe might be in the other foot.

I'm happy to report 20 years later in the US, the shoe has never been on the other foot, but it could happen.

I'm happy to report 20 years later in the US, the shoe has never been on the other foot, but it could happen.