• Sequoia partner Alfred Lin defended the firm’s $213.5 million investment in now-bankrupt crypto exchange FTX.
• Despite the dramatic collapse and associated losses, Lin said Sequoia is “still very excited about the concepts of crypto”.
• Some users of FTX are now suing Sequoia, Thoma Bravo and Paradigm for their involvement in a promotional marketing campaign that allegedly added an “air of legitimacy” to FTX.

Sequoia Partner Defends Investment in Crypto Exchange

Sequoia partner Alfred Lin stood up for the firm’s $213.5 million investment in the now-bankrupt crypto exchange FTX at Bloomberg’s Tech Summit. Despite the dramatic collapse and associated losses, Lin said Sequoia is “still very excited about the concepts of crypto”.

Investment Vision

Lin shared Sequoia’s investing thesis relies on trusting founders and taking calculated risks; some investments will surprise to the upside, while others will surprise to the downside. The venture capital firm has about $85 billion of assets under management with investments in major technology companies and several crypto businesses including FTX and FTX US through two funds.

FTX Legal Issues

Some users of the bankrupt exchange have filed suit against financiers who backed it, including Sequoia, Thoma Bravo and Paradigm alleging they were involved in a promotional marketing campaign that added an “air of legitimacy” to FTX during 2021. All three firms had invested into its Series B round earlier that year for a total raise of $900 million.

Evaluation Process

Lin stated if he were tasked with evaluating FTX again for the first time, Sequoia would likely make same investment decision: “I looked at work we did in 15 different ways…We probably would have made the investment again.”

Conclusion

Despite major losses from its investment into FTX, Sequoia Capital remains confident in its vision for future investments as well as keeping faith with entrepreneurs when taking risks within this space and other industries alike.