“I just think change unfairly favors the startup, the nimble small company,” says Roelof Botha.

The Sequoia partner, whose portfolio includes Unity, 23andMe, Instagram, Instacart, Xoom and YouTube, says he’s hopeful about the opportunities this pandemic has created for companies across a variety of sectors, including healthcare, cloud computing, social and others.

We spoke for an hour with Botha about several topics, including how user behavior is rapidly evolving, trends he’s seeing, his outlook on economic recovery, how he’s evaluating new investments and how fundraising itself is changing. Fun fact: Sequoia has made 10 investments over Zoom since the coronavirus pandemic forced us to stay at home.

The full conversation was broadcast on YouTube, and the embed appears below.

Side note: Extra Crunch Live is our new virtual speaker series for Extra Crunch members. Folks can ask their own questions live during the chat, with guests that include Aileen Lee, Kirsten Green, Mark Cuban and many, many more. You can check out the schedule here.

Below, you’ll find a lightly edited transcript of our recent chat with Botha. Enjoy!

The differences in fundraising based on stage

When you’re listening to a seed-stage company, it’s often about the story. The founders paint a vision of the future. That’s part of what I love about my job, by the way. You’re sitting there and you’re trying to imagine what the world is going to look like one day and whether this company is on the right side of history. Or is it implausible that this will happen? It’s so much fun to sit there and think about that. At the seed stage, it’s about the story.

As you get to a Series A or Series B stage, the company will definitely start to have some metrics: usage numbers, early adoption numbers. If it’s an enterprise company, what are people willing to pay for your product? You start to get a sense of the metrics that back up the story. If the metrics don’t support the story, then you start to wonder if that company makes sense. In the long run, you need to have financials that flow from the metrics. But that’s typically at a Series C or later stage. And clearly, by the time a company goes public, you need to have connected story to metrics to financials.







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