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Succession on a yellow sheet
Don Valentine always wrote in green pen on yellow paper. One day a note arrived with a list: Mike, 1.1. Doug, 1.1. Another young partner, 1.0. The older partners, 0.7 and 0.6. Those numbers were the vision of the carry for the next fund. His own line read DTV, Don, with a question mark, which left it to the partners to decide what to give him.
That is how Michael Moritz and Doug Leone found out they were the two chosen to take over. There was no conversation. Leone only saw the sheet of paper.
Valentine stepped down in 1993, probably somewhere between fifty-eight and sixty. Moritz and Leone went on to run Sequoia together for twenty-five years.
How is carry split among venture partners?
The carry from a fund goes to its general partners, and each partner holds a slice of that pool. The slices are set by the senior partners and can be reset when a new fund is raised. Because the split follows who is expected to drive a fund's returns, a change in the numbers works as a signal of who is taking over.
How did Sequoia get started under Valentine?
Don Valentine worked at Fairchild Semiconductor and National Semiconductor before he founded Sequoia Capital in 1972. His early investments included Atari, Apple, and Oracle, and the firm backed Cisco in the late 1980s. Sequoia later backed Google, whose founders it funded in 1999.
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