Sequoia has gained a reputation over the years for its early bets on younger companies, many of which (Apple, Klarna, and WhatsApp, to name a few) have become tech giants.
Now, as competition intensifies among investors to partner earlier with the most promising startups, and the field of founders hoping to build and launch companies widens, the company is taking a fresh approach. Today it launches a new program called bowwhich will be described as a catalyst (not an accelerator or incubator) that will seek out and then work with cohorts of approximately 15 startups in eight-week sessions, with a focus on “outlier” founders and startups from across Europe and the US
Startups Receive $1M Upfront Investment From Sequoia; Business design mentoring from partners and operators associated with the firm (including founders and other key individuals of businesses she has supported); and a field trip to a legendary company to see it all in action. Sequoia has not yet announced which operators will be working with the first cohort, but said the first on-site visit will be Klarna, where startups will spend time with CEO Sebastian Siemiatkowski, CXO Camilla Giesecke, CMO David Sandstrom and CPO David Fock will spend.
Interested can use from today until April 8th, and the program starts on May 23rd. Arc’s first cohort will be led from London: one week at Sequoia’s offices in the city, then five weeks remote work wherever the startup is typically based, one week working with another local startup, and finally one week at Sequoia’s headquarters in Menlo Park, California. (Subsequent cohorts will do the same, but start with week one in Silicon Valley.)
Arc is co-led by Jess Lee (below left), a Sequoia partner and its chief product officer based in the company’s Silicon Valley office, and Luciana Lixandru (right), a partner based in its London office. Key to this will be its unique selling point (besides opening the door to working with one of the best VCs in the world): its emphasis on finding “breakaway” founders.
As Lixandru describes it, Sequoia will find candidates for Arc through an open process. Warm introductions will not be considered, and anyone can apply to be evaluated, reviewed, and accepted or rejected on an equal basis, using in part the data science that Sequoia’s product team (led by Lee) has built internally to identify potential evaluate investments.
The idea here is that while the tech world has a few tried and true corridors to cater to the tech and startup ecosystem — Silicon Valley, certain universities, and previously a major role at another successful tech company, the three of the stereotypical and akin to These – the growth and increasing decentralization of this ecosystem, accelerated by the last two years of everyone working remotely due to the COVID-19 pandemic, is creating new opportunities to find and for talent wherever they are, to take the step from concept to building a company.
Sequoia — which only established its first official outpost in Europe, in London, in 2020 — believes that while all early startups will benefit from evidence-based guidance and mentoring from Sequoia (we to know What works is the basic thought process), there is an excellent opportunity to do this in a more concerted and programmatic way for founders from less mature ecosystems.
“I really think open applications will benefit European founders even more,” said Lixandru, who has made a name for herself over the years by tapping into less likely regions (like her home country of Romania) to identify and grow businesses support UiPath who have gone into a booming future. “Europe is so fragmented. So many founders I’ve had the privilege of working with started out in atypical tech hubs.”
In practical terms, however, Arc’s launch is also an important competitive move — given what other companies are doing. SoftBank is also taking some proactive steps to get closer to younger startups in earlier stages, such as with its own accelerator efforts. Turn up, which it operates in partnership with Speedinvest. Tiger Global has made a name for itself writing big checks for later-stage companies, but now it’s increasingly not just looking for early-stage investments, it’s now doing a lot more in Europe. Andreessen Horowitz is also taking a more active role in early investments in the region.
Part of the logic of open applications is to more effectively tap into the long tail of founders who may not already know someone or may not be ticking the right boxes on their resumes, and that will hopefully bring a more diverse mix of people to the table overall. This has been a mantra in the tech world for a while, but often feels more like lip service, so the more programs built around the concept, the better.
However, it seems that some lines are still being drawn in this process. Lixandru first told me that Sequoia would also be evaluating founders from Russia as part of the mix — which would be an interesting twist considering how many companies, including VCs, are currently distancing themselves from the country due to the war in Ukraine, Russia’s unprovoked Attacks and the ensuing waves of global sanctions and moral outrage against it.
“We will accept applications from all over Europe, including Russia,” she said. “We think great founders come from everywhere [and] We want to give those opportunities to founders everywhere.” Lixandru’s portfolio includes leading Series A for whiteboarding and visual collaboration startup Miro (before joining Sequoia). Originally founded in Russia, with headquarters in San Francisco and Amsterdam, the company raised $400 million in January and is now valued at over $17 billion.
Sequoia later clarified to me that while they support Russian founders in Arc, they only consider those based outside of the country.
“Enterprise design,” on the other hand, is a concept and approach that Sequoia has been honing for quite some time, with modules it has developed for both later-stage and early-stage startups that cover concepts ranging from the tangible (e.g. how to build a sales team when scaling) to something less concrete (e.g. building a company culture).
With Arc, this content is implemented in a new way, especially to educate founders who are just starting to navigate.
In an industry with a very high failure rate, it’s not surprising that the word Sequoia employees use when describing what they’re trying to do here is “enduring,” with Sequoia being a proven custodian of some of those Skills required to become such a company.
“Business design is more than just building a business,” Lee said in the interview I had with her and Lixandru. “Enterprise design is Sequoia’s way of creating, growing and scaling an enduring business. … It’s the outlier mindset to really think about the scale of the ambition to actually build for possibly a decade or more. And then this community, this acquired community, [it is] just really powerful to be able to tap into that crush and brain trust.