Sequoia Capital, a large venture capital firm, is completely restructuring its fund to be able to invest in cryptocurrency and other “emerging assets.”
Roelof Botha, head of Sequoia Capital’s early investment and development department, said the current 10-year investment system is hopelessly outdated, so the company is changing the structure of the fund. The current system assumes that outside investors invest their funds in a venture capital fund for 10 years, and only then get paid.
The Sequoia Fund will now be launched, collecting investor funds and distributing them through a group of smaller funds. The profits will go back to the Sequoia Fund. Avoiding tight deadlines will allow the fund to hold funds in shares for more than 10 years, and investors will be able to withdraw money at any time.
“Our industry continues to have a tough 10-year funding cycle pioneered back in the 1970s. Microchips are getting smaller, programs have moved to the cloud, and we are still using a floppy-equivalent system. Plus, the best business people want to build reliable companies. Their ambitions are not limited to a period of 10 years. As well as ours, “- said the top manager of Sequoia Capital.
In addition, Sequoia becomes a registered investment advisor, which will allow it to go beyond the “venture capital investment”. For example, investments in cryptocurrencies and IPOs will become available. Few managers would dare to freeze assets in an asset for 10 years in the event that the asset itself exists for about the same amount or even less.
“The new structure removes all artificial time horizons for how long we can partner with companies. Also, this move will allow us to build stronger relationships with partners, ”concluded Botha.
Recall that, according to analysts at CoinShares, for the week of October 18-22, the inflow of funds into cryptocurrency investment products amounted to a record $ 1.465 billion.
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