He mentored under Don Valentine, has helped take multiple companies public, and he is partially responsible for making Sequoia into the firm it is today.
Here are 15 takeaways from studying Doug, his career, and his investment philosophy.
Simplicity wins: If you want to move faster, simple is your friend. When Doug looks for great businesses, he looks for simple operations.
Leaders evolve: Leone began as a competitive investor when he was young and evolved into somebody who values insight and maturity above anything else. This reminds me of basketball coaches (Coach K, Roy Williams, Bob Huggins) who became more mellow as they got older.
Understand intrinsic motivations: Leone was famous for trying to identify what drives a person as early as possible. His go-to line of questioning was figuring out what type of trauma a person had to endure since he believed that that experience shaped their current worldview and motivation. Leone and Sequoia look for humble backgrounds and a need to win.
Culture eats strategy for breakfast. Nothing builds a great culture like winning.
Trust is earned through short-term sacrifice: In the early 2000s, Sequoia was underperforming. The fund was valued at 0.3x, so the Sequoia team did what no other fund would; they cut their carry, fees, and wrote personal checks to LPs. They reinvested all fees and turned a 0.3x fund into a 1.9x fund. It hurt the GPs’ wallets in the short term, but paid back massively in the long run, deepening the trust with their LP base.
Investing firms are becoming technology firms: Sequoia has built itself into a tech-enabled investing firm, realizing they can’t continue to run like a law-firm model. Expect that trend to continue. Seven Seven Six is an example of one of the funds leading that charge.
Invest in outliers: VC investing is all about finding outlier businesses, but what are you doing to find outlier people? How do you spot them? Are you in the right rooms to spot them? Doug believed if a founder is described as “insufferable, maniacal, doesn’t listen,” you should always dive deeper to understand the context.
Capital is not as commoditized as you think: Not every investor dollar you take is worth the same. The right investors can open doors and see around corners; the wrong investors can blow up your company. If you’re a founder, you should date around before committing to any investors (it is a decade-long partnership after all).
We started our careers in venture. After about a week, we had a realization.
We had no idea what we were doing.
Turns out, we weren’t alone.
Junior VCs don’t get training. You’re forced to figure it out on your own.
Learning the rules, tools, and players takes FOREVER to learn. That’s why we made the ultimate VC resource library to speed up the learning curve.