Venture capital fund Sequoia Capital has apologized to investors for the $150 million loss with FTX and it will improve its appraisal for future investments.
As reported by the Wall Street Journal, during a conference call with investors on November 22, Sequoia Capital Partners apologized to investors for a $150 million loss when they invested in FTX.
Sequoia apologized to its fund investors in a conference call for its $150 million loss on the crypto exchange https://t.co/e7SSq03BrO
— WSJ Private Equity (@WSJPE) November 22, 2022
Perhaps this is the first time a venture capital fund with a lot of experience has to regret its decision. Roelof Botha, the company’s global leader, opened the call and he and his colleagues repented for supporting the company, with a $214 million investment in FTX.com and FTX .US on two funds.
Roelof Botha
Sequoia has limited exposure to FTX, but has investments in FTX.com and FTX.US in GGFIII. FTX is not in the top 10 of the fund, and its $150 million expense base represents less than 3% of the fund’s committed capital. The $150 million loss was offset by realized and unrealized gains of $7.5 billion, so the fund performed well.
Sequoia Capital Partners stated that the company has stated that it has been misled by the SBF and will improve its investment due diligence process in the future. Additionally, the company will hire a Big Four accounting firm to audit the financial statements of the early-stage startups it invests in.
As previously reported, Sequoia said it has invested a total of $213.5 million in FTX and FTX US, and has reduced these investments to zero.