20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady
Pat Grady is one of the most successful growth investors of the last decade. As the Head of Sequoia's growth investing practice, Pat has invested in companies with a combined market cap exceeding $250BN. Among Pat's immense portfolio is Hubspot, Snowflake, ServiceNow, Okta, Amplitude, Zoom and Qualtrics. Pat is also one of the best acquirers of talent in venture hiring Andrew Reed, Matt Huang, Julien Bek.
In Today's Episode with Pat Grady We Discuss:
1. The Sequoia Investment Process:
What is the Sequoia investment process today? How has it changed over time?
What could be improved about the process? Where is it weak?
What is the biggest strength of the process?
How do Sequoia remove politics from the investment decision-making process?
Are the best deals "contrarian"? What does Pat mean when he says you do not "get extra points for being contrarian and right"?
2. What Sequoia Look for When Investing:
What is Pat's framework for assessing founders? How does it differ when investing early vs late?
Team, traction, TAM, how does Pat rank the three when investing?
What have been Pat's biggest lessons on market sizing? Does Pat take market timing risk?
How much weight does Pat place on "traction" when investing? How sustainable is PMF?
3. The Three Core Pillars of Venture:
Sourcing: What does Pat rank Sequoia for sourcing? Who is the best at sourcing in the firm?
Selecting: How does Pat rank Sequoia at picking? How has it changed over time? What could Sequoia do to improve their picking ability?
Servicing: What does Pat give Sequoia for their "value add"? To what extent does Pat truly believe that venture investors do add value?
4. Pat Grady: AMA:
Pat has hired some of the best in the next generation of venture investors; what are his biggest lessons in what he looks for when hiring investing talent?
What is his single biggest takeaway from working with Alfred Lin, Roelof Botha and Doug Leone?
What are his biggest takeaways from working with Hubspot, Snowflake and ServiceNow?
Pat Grady - Relentless Application of Force - [Invest Like the Best, EP.378]
My guest today is Pat Grady, a longtime growth investor at Sequoia and one of the firms senior leaders. Pat has been a part of a long list of legendary investments, ranging from Snowflake, Zoom, ServiceNow, Qualtrics, Okta, Hubspot, Notion, and OpenAI, among many others. There aren't many investors who reference as well at Pat, both inside and outside of his firm. We talk about investing, building an investing firm, and building enduring companies. Please enjoy this great conversation with Pat Grady.
Listen to Founders Podcast
For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.
Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.
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Follow us on Twitter: @patrick_oshag | @JoinColossus
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes:
(00:00:00) Welcome to Invest Like the Best
(00:05:48) Doug Leone's Leadership and Changes
(00:06:54) Creating Internal Pressure and Structure
(00:10:46) Sequoia's Team Values and Family Influence
(00:13:40) Assessing Founders and Investments
(00:20:28) Winning Competitive Investments
(00:24:45) Pat’s Early Career at Sequoia
(00:29:38) Memo Writing and Investment Criteria
(00:35:20) Evaluating Companies Through Three Business Criteria
(00:40:15) Building Sustainable Competitive Advantage
(00:47:48) Turning Bad Numbers into Good Investments
(00:51:20) The AI Frontier: Market and People
(01:01:13) Harvey: The AI Legal Assistant
(01:05:33) Sequoia's Platform Strategy
(01:17:16) The Importance of Teamwork and Performance
(01:26:07) Legendary Potential: Relentless Application of Force
(01:28:37) The Kindest Thing Anyone Has Ever Done for Pat
Sequoia Capital’s Pat Grady and Sonya Huang on Generative AI - Ep. 187
In the latest episode of the NVIDIA AI Podcast, host Noah Kravitz is joined by Pat Grady and Sonya Huang, partners at Sequoia Capital, to discuss their recent essay, “Generative AI: A Creative New World.”
The authors delve into the potential of generative AI to enable new forms of creativity and expression, as well as the challenges and ethical considerations of this technology. They also offer insights into the future of generative AI.
Grady and Huang emphasize the potential of generative AI to revolutionize industries such as art, design and media by allowing for the creation of unique, personalized content on a scale that would be impossible for humans to achieve alone.
They also address the importance of considering the ethical implications of the technology, including the potential for biased or harmful outputs and the need for responsible use and regulation.
Listen to the full episode to hear more about the possibilities of generative AI and the considerations to be made as this technology moves forward.
20VC: Sequoia's Pat Grady on What Sequoia Is Focused On Today, How Sequoia Think About Investment Decision-Making Processes & Why It Is Important To Trade A Few Points of Efficiency for Culture When It Comes To Attribution
Pat Grady is a Partner @ Sequoia, one of the world's leading and most renowned venture firms with a portfolio including WhatsApp, Zoom, Stripe, Airbnb, Github and many more incredible companies. As for Pat, at Sequoia he co-leads the firms growth investment team and has been involved with some of the true greats, Hubspot, Zoom, Okta, Qualtrics, the list goes on. Prior to Sequoia Pat spent three years with Summit Partners.
In Today's Episode You Will Learn:
1.) How Pat made his way from Summit Partners to co-leading Sequoia's growth investment team? Was it intimidating for Pat entering a partnership with Jim Goetz, Don Valentine, Roelof Botha? How did he manage those nerves?
2.) So many different funds and activities, so what is Sequoia focused on today? Where does Sequoia think about their ideal insertion point today? How do they see the deployment of their blended capital across rounds? Does Pat believe in ownership on first check or building ownership over time? How does Pat think about the extended window of privatisation with IPOs being continuously delayed?
3.) Does Pat believe that VC really is a team sport today? Does Pat agree with Josh Kopelman's statement, "I would rather be a better picker of partners than investments"? What are the core requirements, skills and traits that Sequoia looks for when adding to their partnership?
4.) What is the investment decision-making process at Sequoia? How do they feel about unanimity vs conviction based investment decisions? What are the pros and cons of each? What does Pat believe is the most non-obvious investment decision that Sequoia have made? Sequoia run an incredibly rigorous process when investing, how does Pat balance between that level of rigour with the speed to win the deal?
5.) What advice would Pat give to someone that has just gained their first institutional board? What does Pat know now that he wishes he had known when he started in VC? How does Pat think about time allocation across the portfolio? Concentrate on winners or the strugglers are where your reputation is built? Leading Sequoia Growth and with a beautiful family, how does Pat approach work/life balance?
Items Mentioned In Today's Show:
Pat's Fave Book: God Friended Me
Pat's Most Recent Investment: Embark: Revolutionizing Commercial Transport
As always you can follow Harry, The Twenty Minute VC and Pat on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
20VC: Sequoia Partner, Pat Grady on Why Data Is The New Oil, Why We Will See The Return of The Apprenticeship Model in VC & The Defining Characteristics of The Next Generation of Great Software
Pat Grady is a Partner @ Sequoia Capital, one of the world's leading funds with prior investments in the likes of Apple, Google, Whatsapp, Paypal, Stripe and many more. At Sequoia, Pat has made investments in many past guests of this show and the SaaStr podcast including Zoom, Namely and Qualtrics, just to name a few. Prior to Sequoia, Pat spent 3 years with the team at Summit Partners.
In Today's Episode You Will Learn:
1.) How Pat made his way into the world of VC and one of the most famous funds in the world, Sequoia?
2.) How does Pat view the apprenticeship model in VC? How can VCs attempt to develop and convey the founder empathy when they have not been a founder? Do 'career VCs' get the same respect from founders?
3.) What does Pat believe to be the defining characteristics of the next generation of great software? What are the commonalities?
4.) Pat has said before that 'data is the new oil', what makes Pat think this? How does this affect his investment thesis going forward? Are there elements of being 'data long' that make Pat nervous?
5.) How does Pat think the data incumbency advantage can be mitigated? What can startups do to build a moat?
Items Mentioned In Today's Show:
Pat's Fave Book: The Boys In The Boat
Pat's Fave Blog: CB Insights
Pat's Most Recent Investment: Namely
As always you can follow Harry, The Twenty Minute VC and Pat on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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