Roelof Botha is familiar with crises: The South African was appointed CFO at Paypal in September 2001 when the terrorist attack on the World Trade Center shook the markets. Half a year later he listed the company co-founded by Peter Thiel and Elon Musk.
In 2003 he moved to Sequoia Capital and helped investments by the legendary Silicon Valley company in YouTube, Instagram, Eventbrite and the payment service provider Square from the start-up to the listed billion dollar company. He has been responsible for Sequoia’s US investments since 2017.
At the beginning of March, Sequoia startled many in the tech scene with its “Black Swan” memo, in which the investment partnership warned start-ups of the consequences of the corona pandemic and advised founders to keep their money together so as not to face the crisis In the interview with Handelsblatt, Botha talks about the consequences of Corona and Sequoia’s interest in European start-ups.
Read the full interview here:
Mr. Botha, for many start-up founders, the corona crisis began when Sequoia described it in a blog post as the “Black Swan of 2020”. Has your opinion changed since then?
The Sequoia partners meet every quarter for “Blue Sky” meetings, where we discuss new ideas and discuss trends. From such a meeting, the idea of the “Black Swan” memo arose on March 5. We felt it was our duty to raise the alarm and tell founders what to expect. At a meeting like this two weeks ago, we discussed how we would imagine the world after Covid.
Covid is pulling the future forward in many areas. Habits such as shopping for groceries online or video conferencing in business would normally have taken years to reach the masses. Now they are completely normal. This shock will accelerate the future that Silicon Valley has built.
How does a start-up investor work in the crisis?
We have completed ten new seed and A-series funding in the United States since March 1st. We are in constant contact with our founders via Zoom. We are shock absorbers and give advice on how to get through this crisis. For example, we have been organizing rounds for seven weeks in which founders exchange ideas about cash flow management, working in distributed teams or lessons from China.
Despite the crisis, Sequoia recently hired Luciana Lixandru as its first partner in Europe. Why are Europe’s startups interesting right now?
We have already invested in brave start-ups in Europe such as Klarna, Unity or UiPath in the past decade, most recently also in the seed phase of Evervault and n8n from Berlin. There is a broad foundation of well-trained IT specialists and consumers in Europe who are open to new products. When it comes to topics like AI microprocessors, design or fintech, there are just as exciting companies in Europe as in the USA. We want to expand our activities there.
Thank you for the interview!
More: Less capital flows into European start-ups during the crisis.