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Sequoia has only one Google
The conventional venture view is that only 10 or 15 deals a year matter and a firm that misses them is irrelevant, which fuels a fear of missing out. It is true that the top 10 or 15 deals drive the returns in any given year. But a great company isn't born every year, and the whole venture industry hasn't produced another Google since that company was funded in 1998.
Munger's observation applies: no one is that lucky and no one is that good. A firm with a few amazing companies to help build can count that as a really good life.
Telling a good company from a great one is among the hardest lessons. Losers announce themselves, because a company that keeps running out of cash is a sure sign something is wrong. The good ones are harder: good people working hard on businesses that can create generational wealth, but not multi-billionaires. Altos has had billionaires emerge but never an entrepreneur worth $100 billion or $200 billion, and it keeps going.
How did Google become a venture legend?
Sequoia Capital and Kleiner Perkins each invested 12.5 million dollars in Google in 1999. Google's IPO in August 2004 raised about 1.7 billion dollars. Those two stakes became among the most valuable in venture history. No later company has matched Google's combination of scale and profit across the industry.
Where did the fear of missing out come from?
Patrick McGinnis coined the term FOMO in a 2004 opinion piece in the Harvard Business School student paper The Harbus. He described the anxiety of students who felt they had to attend every event. The term spread through social media in the 2010s and entered the Oxford English Dictionary in 2013. Investors use it for the pressure to chase whatever deal others are chasing.
How rare are billion-dollar startups?
Investor Aileen Lee coined the word unicorn in a 2013 TechCrunch article. She counted 39 US software startups founded in the previous decade that had reached a valuation of 1 billion dollars. That was about 0.07 percent of venture-backed software startups. The term has since been applied to far more companies as valuations rose.
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