Sequoia Capital Exec Shines Light On Due Diligence On FTX Investment

Sequoia Capital has lowered the management fees of two recent venture funds in preparation for a slowdown in the investment environment, said partner Alfred Lin.

Limited Partners have funded Sequoia’s Crypto and Ecosystem Fund, which will launch in early 2022. Management fees can now be paid based on deployed capital rather than the standard model of capital under management. The changes to the fee structure were announced to investors in December.

How much did Sequoia invest?

In addition to a US$600 million crypto fund investing in crypto businesses and tokens, the company announced a US$950 million ecosystem fund. This is to support Scouts and Funds founded by Sequoia alumni. According to Lin, his 10% of the crypto fund has already been spent.

The world’s largest venture investor made an unprecedented concession with the decision after U.S. venture capital deals fell 31% from its 2021 peak. With limited partners to test.

Also read: Tyler Winklevoss Files Politically Motivated SEC Lawsuit Against Gemini

Did the VC firm follow FTX’s due diligence?

The SEC reportedly investigated several investors during FTX’s due diligence process.

Speaking at Thursday’s StrictlyVC event, Lin said that thorough research and due diligence on FTX has been conducted through internal processes that have been initiated. Lin claimed they were misunderstood in many situations.

Sequoia Capital has reduced its investment in FTX by $150 million from its third global growth fund. He also raised $63.5 million from the crossover fund, bringing his total investment in FTX and FTX US to zero.

The company will continue to invest in cryptocurrencies.

“We invest even in downturns, but we never stop growing. We are optimistic about the future of cryptocurrencies and many other industries,” added Lin.

Also read: Court Allows FTX to Sell Japanese, European Subsidiaries

Shourya primarily reports on cryptocurrency prices, NFTs, and the metaverse. She graduated in journalism, post-graduate, she always wanted to be involved in the business field.and she connects with her [email protected] Or tweet at Shourya_Jha7

The content presented may contain the author’s personal opinions and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication accepts no responsibility for your personal financial loss.

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