Inside Sequoia’s Steve Jobs strategy: How the fabled VC firm sniffs out unconventional diamonds in the rough
Nearly 50 years ago, Sequoia Capital was one of the earliest investors to take a swing on the personal-computer startup Apple, Inc. Now, the venture capital firm’s managing partner has revealed how Sequoia goes about looking for the next Steve Jobs.
Speaking at the Fortune Brainstorm Tech conference in Park City, Roelof Botha told Fortune editor-in-chief Alyson Shontell that Sequoia is constantly looking to evaluate the quality of an idea, rather than the credentials of the person who’s pitching it.
“Steve Jobs originally was not funded by other people because he wasn’t wearing shoes and was unconventional,” @sequoia Managing Partner @roelofbotha says at #BrainstormTech.
“Yet, Don Valentine saw through that because he saw the quality of the idea.” https://t.co/vc0m8sRbaa pic.twitter.com/YIfdr6B58B
— FORTUNE (@FortuneMagazine) July 17, 2024
“Steve Jobs originally was not funded by the people on Sandhill Road because he wasn’t wearing shoes and was unconventional,” said Botha, who was a top executive at PayPal before joining Sequoia. “Yet Don Valentine saw through that because he saw the quality of the idea.”
Jobs’ career trajectory is renowned for his unlikely rise from college dropout to co-founder of a revolutionary tech company. When Sequoia founder Don Valentine met him, he was working as a technician at Atari. But he pitched Valentine on an idea for a personal computer that the venture capitalist saw potential in.
“I went to Steve’s house and we talked, and I was convinced it was a big market just embryonically beginning,” Valentine recalled in 2011 documentary Something Ventured.
The rest is history. Sequoia would end up investing $150,000 in Jobs’ startup, and in 1980, Apple, Inc. went public.
That same attitude, Botha said, is now being applied to founders in the burgeoning artificial intelligence market.
“Some of the companies we’re backing in AI specifically are some of the world’s leading researchers in a particular domain,” Botha said. “But then we listened to a founder who had a brighter idea for an application—they’re fresh immigrants, they’re a team of three, and they have no academic credentials that we can easily verify. But the idea is interesting and they have customers that can reference the quality of what they’re producing.”
David Kang, a professor of international relations and business at the University of Southern California, told Fortune in 2023 that when he first began tracking the alma maters of Fortune 500 top executives in 1999, seven or eight CEOs had never even completed an undergraduate degree.
“The results were stunning,” Kang said. “Like everyone else, I thought Ivy Leagues would dominate. But the largest place they had gone to was no college at all.”
Of the 2023 Fortune 100 CEOs, only 11.8% attended Ivy League schools as undergrads, and less than one-in-ten obtained an Ivy League MBA. The majority of the top 20 CEOs went to public universities, and five didn’t have any kind of graduate degree at all.
“Our job is to not to look at the surface level of what people can accomplish,” Botha said at Wednesday’s conference. “But rather to look at the quality of their idea.”
