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>“There is so much money now (in the tech sector). You need to have a bigger war chest,” said a Hong Kong-based investment banker familiar with Sequoia’s strate

>“There is so much money now (in the tech sector). You need to have a bigger war chest,” said a Hong Kong-based investment banker familiar with Sequoia’s strategy. But what if it’s a bubble?

bartozone 9y ago
Well, it's not THEIR money. :)
junkscience2017 9y ago
Sequioa's timeframe is far beyond that of stock cycles. They have been around since 1972 and have been investing in tech for decades.
ttul 9y ago
If it’s a bubble, then that will be a long lived fund.
jamestimmins 9y ago
In certain respects, it doesn't matter if it's a bubble. Sequoia's job is to allocate funds across the tech industry. Simply by giving them money to invest, their LPs accept the risk of systemic issues that could result in the entire tech industry crashing. In part this is allowed by the fact that most LPs diversify their funds, so they're not completely vulnerable to problems in a single sector. It's also because funds are rarely judged against absolute return; they're judged against benchmarks. If the entire market falls by 10%, and a fund only falls by 8%, then they're still doing well relative to their benchmarks. But what's more important to Sequoia is not missing out on returns. LPs aren't investing so that Sequoia will keep them from losing money. If that were their primary goal they would just invest in CDs or government bonds. They're investing with Sequoia so they don't miss out on the upside. And if that's the priority, and Sequoia's competitors have far more money to allocate (see SoftBank with their $100 billion fund), then Sequoia also needs more money to allocate to stay competitive.
mandeepj 9y ago
Can we please forget about this word called bubble? Do you like recession? There are certain set of people who are constantly posting about it from last 3-4 years. It has not happened and it ain't going to happen so let's move on.
- nradov 9y ago
  If you wait long enough there's always another recession.
- rorykoehler 9y ago
  Of course it will happen. Over-inflation of asset value leading to large scale economic adjustment is a built in feature of our economic model.
- JumpCrisscross 9y ago
  > It has not happened and it ain't going to happen so let's move on Bubble versus Not Bubble is a measure on expected returns. Past performance does not guarantee future results. Projecting a half-decade sample of opinions across infinity is absurd.
- seanmcdirmid 9y ago
  We are definitely due for a recession, that it hasn't happened yet doesn't mean it won't happen, well, it almost certainly will, just no one has any idea when! Just like we aren't quite sure how much value being created ATM is bubbly vs. real (we will know when the bubbly stuff pops) .

>“There is so much money now (in the tech sector). You need to have a bigger war chest,” said a Hong Kong-based investment banker familiar with Sequoia’s strategy. But what if it’s a bubble?

bartozone 9y ago

Well, it's not THEIR money. :)

junkscience2017 9y ago

Sequioa's timeframe is far beyond that of stock cycles. They have been around since 1972 and have been investing in tech for decades.

ttul 9y ago

If it’s a bubble, then that will be a long lived fund.

jamestimmins 9y ago

In certain respects, it doesn't matter if it's a bubble. Sequoia's job is to allocate funds across the tech industry. Simply by giving them money to invest, their LPs accept the risk of systemic issues that could result in the entire tech industry crashing. In part this is allowed by the fact that most LPs diversify their funds, so they're not completely vulnerable to problems in a single sector. It's also because funds are rarely judged against absolute return; they're judged against benchmarks. If the entire market falls by 10%, and a fund only falls by 8%, then they're still doing well relative to their benchmarks. But what's more important to Sequoia is not missing out on returns. LPs aren't investing so that Sequoia will keep them from losing money. If that were their primary goal they would just invest in CDs or government bonds. They're investing with Sequoia so they don't miss out on the upside. And if that's the priority, and Sequoia's competitors have far more money to allocate (see SoftBank with their $100 billion fund), then Sequoia also needs more money to allocate to stay competitive.

mandeepj 9y ago

Can we please forget about this word called bubble? Do you like recession? There are certain set of people who are constantly posting about it from last 3-4 years. It has not happened and it ain't going to happen so let's move on.

nradov 9y ago
If you wait long enough there's always another recession.
rorykoehler 9y ago
Of course it will happen. Over-inflation of asset value leading to large scale economic adjustment is a built in feature of our economic model.
JumpCrisscross 9y ago
> It has not happened and it ain't going to happen so let's move on Bubble versus Not Bubble is a measure on expected returns. Past performance does not guarantee future results. Projecting a half-decade sample of opinions across infinity is absurd.
seanmcdirmid 9y ago
We are definitely due for a recession, that it hasn't happened yet doesn't mean it won't happen, well, it almost certainly will, just no one has any idea when! Just like we aren't quite sure how much value being created ATM is bubbly vs. real (we will know when the bubbly stuff pops) .