Sequoia Tells Investors They Are Sorry for Bad FTX Investment: Report

Sequoia, one of the most prominent VC firms in the world, has apologized to its backers for the investment they made in FTX. As was previously reported, once the wheels fell off of FTX, Sequoia wrote its investment down to zero – a potential $150 million loss. At that time, Sequoia sent a letter to its LPs, stating:

“At the time of our investment in FTX, we ran a rigorous diligence process. In 2021, the year of our investment, FTX generated approximately $1 billion in revenue and more than $250 million in operating income…” 

Apparently, the diligence was not rigorous enough.

To make matters a bit worse, Sequoia published a glow piece last September on Sam Bankman-Fried, former FTX CEO and founder, that raved about the prospects for the company. To quote the article:

“To be clear, SBF is not talking about maximizing the total value of FTX – he’s talking about maximizing the total value of the universe. And his units are not dollars: In a kind of GDP for the universe, his units are the units of a utilitarian. He’s maximizing utils, units of happiness. And not just for every living soul, but also every soul – human and animal – that will ever live in the future. Maximizing the total happiness of the future – that’s SBFs ultimate goal. FTX is just a means to that end.”

The author stated that following his chat with Bankman-Fried, he was convinced he was talking to a “future trillionaire.”

Sequoia may have a different definition of happiness than most… The article has since been deleted from the site.

According to the WSJ, during the call between investors and the VC, Sequoia claims it was misled by Bankman-Fried. Due to the excitement, Sequoia apparently “shirked traditional corporate controls such as external board oversight…” In the future, Sequoia is expected to have accountants complete an audit before a big investment.






Register Now!
Sponsored Links by DQ Promote



Send this to a friend