Jeff Wang
speaker
190 appearances
1 recordings
1 series
first heard Oct 2024
last heard Oct 2024
Jeff Wang’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
So there is a portion of our business that our portfolio that is prior or existing Sequoia portfolio companies, right? That's maybe about a third of the portfolio is that there's a lot of our business that is not there. We own, for example, Shopify was not a Sequoia portfolio company. It's a company that we admired in the private markets, but we did not invest in the private markets.
And our first chance to invest is when they go public, right? So that is a very different discipline. And then also having the discipline to go know when to buy and sell specific companies. You know, I was talking to Pat Grady about this the other day. We're not just judged on, okay, did we sell this company at the right time? But then did we go buy something else because we sold this company?
that outperformed this company when we sold at that time, right? I mean, you have to be deploying capital all the time. It's not just... Is that not a dangerous mindset to take?
Yeah. And so our bias is definitely, I'd say to keep something because you just know it best, you know, the team, you have a lot of confidence in what they're doing. I think it is really hard to say, sell something that's 10% too expensive, hope to buy it back. when it comes down 10% and then continue to ride it. That is a very hard discipline. And so I don't focus on the short term.
I think that those are the small dials. I tell my team, don't tell me if service now is 10% too expensive. If we have a three to five year investment hold period, 10%, if you get six months ahead yourself in terms of the pricing, it's not going to impact your IRR that much.
Where we have to be careful though is if it's now 18 months ahead in a three to five year investment time horizon, because now it really starts to impact your IRRs. And then we have to really think about trimming it back and maybe potentially rotating into something else. But if it's 10% too expensive, I don't sweat those details. I think about the big dials and the big dials are really...
Are you making the right investments? Is your investment process working? Is this company going to be a much bigger company over the next five years?
I think most of the time it's 10% and it doesn't matter. I think 2022 was a period where a lot of these stocks got ahead of themselves. We had to trim, we trimmed a bunch, but we should have trimmed more. I mentioned the Shopify example where Shopify from the 2022 price is still back to, I think about halfway to the peak, right?
Whereas, you know, you have other companies say a ServiceNow that is now above the peak. So you do need to make those choices very actively.
We've looked at this and it's surprisingly consistent. I'm not really sure why that's the case, but it's surprisingly consistent. The area where we have done really well actually are some of these private companies where we can partner with the growth team primarily and co-invest alongside early on. And so I'm I think the private portfolio has done really nicely.
And then you write it into the public portfolio.
I think a couple of reasons. So I think one, the crossover thesis of investing in late stage private companies, getting to know them well, and then having a better view on whether to own them into the public markets is still fundamentally very sound. Do you really get to know them better? And if so, what do you get to know? So I'll give you an example. So NewBank is a Sequoia portfolio company.
As you know, Doug is on the board. David and I joined Sequoia at around the same time. SCG led an investment in a secondary round in 2019. We participated in later rounds again at the IPO. We even bought shares in post IPO in the straight public markets. That's now a top five position in the portfolio.
And if we were doing our jobs right, I think we should know that company better than anyone else in the world.
I think it still helps. I mean, I've known, for example, I've known Daveed, but I've also known the CFO Wago for a long time before he was the CFO at the company. There's only so much that Doug can say, look, go help this person or go help that person, go make these connections. There's a part of it that just has to be organic, right? Right.
So I think also having a perspective on these companies from a competitive standpoint also helps us inform public market investing and vice versa. And then we're also able to allocate between publics and privates based on where we see the best opportunities at that specific moment. And so right now, for example, we do not see for SCGE as many opportunities in the private markets.
And so most of our attention is actually on the public markets. And so we can flex between those depending on where we see the opportunity set. One other thing is over the last few years, there have been a lot of tourists, as you know, a lot of tourists, mostly on the hedge fund side who have dabbled in private markets and they've gotten burned. Those tourists are out of the market.
We don't see them anymore. And so I do think the crossover market is getting more attractive and it's getting more attractive as this one tourist exit and two, as the IPO markets open up again.
I'm not sure because the public markets are still the biggest. I mean, they're the biggest capital markets. It is freely tradable. Liquidity is important for a lot of institutions. And I do think there is still for companies still a big branding event when you go public. There will be value to companies going public.
I don't know when some of these big companies that have stayed private for a long time are going to go public. But look, I look at, say, Aclarna. I mean, Sebastian clearly wants to go public. There are a lot of reasons for that. And I think employees want these companies to go public, right? They're excited about it.
Showing 41–60 of 190 · page 3 of 10
← Previous
Next →