The issue is around how many deals Sequoia funds. If other investors think that Sequoia already has the best 3 companies in any class sewed up before demo-day,

The issue is around how many deals Sequoia funds. If other investors think that Sequoia already has the best 3 companies in any class sewed up before demo-day, why come to pick up the less interesting companies. Chris Dixon wrote a good post on this recently: http://cdixon.org/?p=1746 http://cdixon.org/?p=1746