Fireside: Matthew Miller & Luciana Lixandru, Partners at Sequoia Capital - Sequoia in Europe

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Hey everybody. Warm welcome to the session with Sequoia Capital. My name is Mika Hutton and I'm the CEO at Slush. Secular Capital is no doubt one of the most prestigious venture funds in the whole world and admired by many. Since 1972 they have invested into over 1000 companies, including companies like Apple, Google, Oracle, Nvidia, GitHub, PayPal, Stripe and the list goes on. Through the 1980s, Sequoia had a rule established by the first partners, if we can't ride a bicycle to the company's office, we won't invest. Well now in 2020, Sequoia is opening their European office and the question is why? Why now? And what should European founders know about this? I'm joined by three brilliant minds for this session, Luciana, Matthew and Steve. Luciana Lisandru is the European partner at Sequoia, last year's Midas list number 20 and also former partner at Accel. Also we're joined by Matt Miller, partner at Sequoia for the soon nine years and he has worked with companies like Confluent, Okta, Craft Core and many, many others. Luciana and Matt are joined by a brilliant journalist, Steve oh here who is a tech run journalist focusing on especially European startups, products and companies. And that's the lineup for today. And before we head to the session, just a couple rules and couple thoughts for the session, how we're going to run it. So practicalities. So the discussion will be around 20 minutes followed by Q and A and if you want to ask questions, simply use the Zoom Q and A feature. We usually have time to, depending on the length of the questions to three to ten questions. Let's see how it goes this time. And after the session we're going to follow up with the insights through your email. And finally we're happy to retweet your tweet. So remember, just tag HQ and that's pretty much it. Let's jump right away to the session then Steve, I'll let you take the stage.

Thanks. Okay, so we don't have like a tremendous amount of time. So I want to get straight into it. Now for those who've been covering the industry in Europe for as long as I have, we'll know that in the past Seduia has been at some points maybe slightly disparaging about Europe, I mean a long time ago, particularly Michael Moritz. So I thought it'd be fun to kick things off by reading back one quote from the past which is that he said, I think he was talking about the European Union and Europe and its attitudes towards American tech giants. And I quote, he said, rather than pointing across the Atlantic and seeping state goats, the commissioners, that's the European Union, may want to start a series of investigations into Europe's own shortcomings. So my question is, and maybe, Matt, I can start with you. What. And then we get to Luciano. What were or are Europe's shortcomings? And in that context, why is Sequoia launching in Europe and doubling down? So in other words, what has changed?

Yeah, I wouldn't necessarily call it shortcoming, Steve. I would say that there has been this evolution and maturity of the tech ecosystem that has been really meaningful, that has attracted us to want to put down boots on the ground and be more invested in Europe than ever before. And I think a few things have changed in the market. I think one is this change in the attitudes of young people. So Europe has always been this place where there's been incredible talent coming out of the computer science programs across the universities across the continent and in the uk. And these young people previously were going into careers in investment banking and consulting or bigger conglomerates. And now those young people are interested in startups and technology careers and that's fueling a lot of great ideas and a lot of great talent. There's been capital invested in the system and companies have been able to get going. And for the first time we're starting to see $10 billion plus companies. And there was this long time this question of when will there be a $10 billion plus startup? And now there's multiple of them across the continent. And now the question's really changed to when will there be the next hundred billion dollar startup in Europe? And I think it's just an evolution over time. And I think that people in Europe are getting more and more excited about startups and technology as an opportunity and we find ourselves getting pulled more and more. So when we are looking at we want to invest in the best AI micro, best AI semiconductor company in the world, we looked at them in China, Israel and Europe. And the one we wanted to invest in was graphcore in Bristol. And when we looked at wanting to invest in the best process automation company in the world, we looked at automation anywhere in California and we looked at UiPath in Romania, and we looked at companies all over the world and the one we wanted to invest in was UiPath in Romania. And that is increasingly becoming the case. And so we feel like Europe is more relevant than ever and more important than ever. And we feel like there is an increasing share of global market leaders coming from the continent that we want to be partners with early on in their journey. So that's why we're coming.

I think Matt is spot on. And what I would add is that to some extent, success breeds success too. I think role models are really powerful. And the fact that there have been these people, category leading companies created out of Europe, but that are winning on a global scale like Spotify and Adyen and Uipath that Matt mentioned and Unity and the list goes on, I think that's really inspirational to the next generation of founders and I think that has helped a lot.

Now, you mentioned sort of companies that are valued at over $10 billion. These are not unicorns. These are, I think some people call them Deca Corners. Right. And one of those companies, of course, is Klarna, which Sequoia has backed and I believe backed in 2010. Right. I mean, that's like 10 years ago. So it still feels like a long time coming to get to Europe. I mean, it'll double down. But of course you've been investing in Europe quite quietly over many, many years. And I'll get back to that in a minute. But first of all, can you clear something up? The Sequoia Fund. So when you invest in Europe going forward, that's not from a separate fund, is it? That's from the same fund in the U.S. is that correct?

Yes, I'm happy to talk about this. Absolutely. We work as one partnership across two geographies and we invest from the same pool of capital across both geographies. And the rationale behind that is exactly what Matt talked about. We want to be able to partner with category leading companies. And if they start in Paris or in Stockholm or in San Francisco, for us, it does not make a difference. We want to partner with them early and we want to be able to help them on the ground early again, whether they start here in Europe or.

In the US and are you able to share how the carry. So in other words, the profits that the fund makes are going to be split across the US and Europe. And I'll tell you why I asked that question because a lot of VCs have told me over the years that the value that Sequoia investment in Europe brings most of all is connections to the U.S. so I'm wondering how you're going to incentivize the U.S. team that's on a different timeline, isn't on the ground to help those European startups. And that's what I'm asking about, Carrie.

So one of the Things, Steve, that I love the most about Sequoia, having been here close to nine years now, is the way that we operate is very, very team centric in that everybody is compensated the same amount in a fund, whether or not it is the investment that they led or the investment their partner led. And we drive towards having great funds for our LPs. When we make an investment, we lock arms together as a team and we work collectively to help that company be successful. One of the greatest things that Sequoia is when we have a wonderful event like the IPO Unity, which occurred lately, which is another company we've been investors in for a long time, that was started in Europe. When that event happens, we send it around an email internally where we talk about how everybody touched, who all touched the company and what the impact they had from Sequoia. And that's something that we really aspire to as a team. And so we look at these European opportunities as we want to help them in every way we can from the US from Connections. We're also planning to apply the team in the US for various aspects of company building. Like, we have Carl Eschenbach as part of our team, who's arguably the best software go to market leader on the planet, scaled VMware from 60 million to 7 billion of revenue. We have Bill Corin on our team, who was the SVP of engineering at Google and one of the best engineering leaders on the planet. We have Bogomil Bolkonski, who's one of the best product marketers on the planet. And so we bring these talented people to bear across all of our investments, whether they be in Stockholm or San Francisco. And the economic model is one that supports that.

And another question I get asked a lot is when I talk to seed investors in Europe and I say, hey, what do you think about Sequoia coming to Europe? Property doubling down on Europe? The seed investors always say, yeah, it's like, it's great. They don't compete with us, they invest further up the funnel. But of course, Sequoia does deceit and the same. By the way, the Series A investors say the same. They're like, oh, no, Sequoia does B round. So can you try and clear up once and for all, like, what is Sequoia's seed strategy, particularly in Europe? And what stages is the European team going to be investing in going forward?

Absolutely. I'm very happy to talk about this. And I think this was one of the things that really got me so excited about how Sequoia operates. We Invest throughout the journey of a founder and throughout the journey of a company. We invest everywhere from seed to growth, when companies are later and beyond. In fact, our tagline is from idea to IPO and beyond. So we do invest across stages. Now, that said, we want to be very collaborative, especially at the seed stage. We, you know, in Europe, the seed ecosystem is very local. There are great seed funds based in France, based in Germany, based in Eastern Europe, and the list goes on. And we want to collaborate with these seed funds. We do want to partner early with founders because we think that the type of outlier founders who really want to change the status quo, the type of founders we want to partner with, we want to find them as early as possible and we will be collaborative at seed.

And how does Sequoia look at, you know, the signaling issue, by which I mean is if you do a seed round and then you don't do the Series A round, obviously the market is like, hey, what's going on here? So I'm just wondering if you're going to be covering those from super, super early. But yeah, how do you see signaling?

Yeah, so that's a question that we get, we receive often. The reality is we're in a hyper competitive venture market where there are a lot of wonderful funds that can do great things for companies that are trying to find opportunities to invest. And there are times where it makes sense for us to double down and invest more. There are times where the founder might want to have another party around the table for reasons like they might have something or some partner that they gravitate to. And so signaling feels to be less of an issue because every round these days is a competitive dog fight. And so sometimes we have the opportunity to lead the next round and we burned that and it works out. Sometimes we do not and we hope to do, we hope to lead as many of the future rounds as we can. But you know, companies go different paths and choose different alternatives.

At the end of the day, it's up to the entrepreneur.

Exactly.

I mean, I guess it is. Unless you guys don't want to do the Series A after doing the seed, then, I mean, that's the signal, right?

Yeah, I would push back on that because I'd argue that there are many seed investments that we have done that have been led by some of our most esteemed competitors. Series A. And so it's a matter of everybody has a different perspective, everybody is doing different work. It's a very hyper competitive environment. And, and there are many of the seed investments that have Been led by Index or Andreessen or other companies where we have done the seed, where they led the later rounds.

Okay, great. Yeah, that answers that one. So I'm thinking another one I want to clear up again. I'm sort of relaying all the mythology around Satoya and Europe here. So I'm doing a great public service. The other one is, you're welcome. So I want to talk about deal flow at the very early stage in terms of if Sequoia is doing seed. And as I say, it's known they are, they do, but they're not always announced a lot of these deals. Right. Is it true that Sequoia has. So I know you have an angel network in the US but I'm hearing that there's an angel network or there's some angels that you formally have as like a state scouting network in Europe. Is that true? Is there a scouting network in Europe?

That's absolutely correct. One of the things that we engineered about a decade ago was we wanted to equip the people who were close to our ecosystem to be able to go and identify great investment opportunities for ourselves. And so we have a Scouts program that's been written about and talked about here in the United States. And one of the things that we have done as we've entered Europe more formally with partners on the ground is we've extended our Scouts program to include European contacts and the ability to invest in companies that are based in Europe.

And what I would add to this is that it's also really about building a community. We want to bring people into the Sequoia community as we're getting started in Europe. So these are people that we have known for a long period of time, we've been working with for a long period of time. And yes, it is of course about finding the next really great entrepreneur and, and the next really great company, but it's also for us about building a tight knit community in Europe.

And in terms of the Scout network here in Europe, how many people are we talking about at the moment?

No, I was just going to say we don't actively disclose the numbers because the numbers vary from time to time. Some people come on, some people come off, but it's something that we're in the early stages of building and very excited about the people that we have as part of this community.

Okay, awesome. So I want to talk about competition in terms of competition for like getting in on deals and how Sequoia coming to Europe may change the competitive dynamics. Obviously it's known that you know, the axel were not really happy when Luciano left, which obviously is a massive compliment. I really hope that TechCrunch are just as unhappy if and when I leave. But more seriously, will Satoya formally come into Europe? Do you think it will push up valuations? You mentioned before, it's hyper competitive already, but this actually feels like even though it's amazing progress for Europe for firm like Sequoia to come here, it does feel like dynamics might shift.

I think that first of all, I respect, and we respect all our competitors on the ground. I had a great eight years at Excel. Index has done a fabulous job here as well. And there are more and more funds from firms from the U.S. looking at Europe, I think that at the end of the day, the type of founder who wants to work with Sequoia is the founder who wants to win on a global scale. If you think about how Sequoia is structured, we started in the Valley five decades ago. And if you think about firms that have really shaped venture capital over the past five decades, from my perspective, this Sequoia is at the top of the list. We have been active in India and in China for over a decade now. We're on the ground in Europe. So I think there will be a selection, right? There will be a certain founder chemistry and a certain founder fit who, who will make a lot of sense for those founders to partner with Sequoia.

And I would just add Steve, on the Luciana point. I can't even express, like, how excited we are to have Luciana as our first partner on the ground in Europe. We've been studying and planning and preparing for this entry for well over a year. And from the very beginning, we knew that Luciana was the partner we wanted to have to build this, who identified her as the best rising star investor in Europe. And she was always at the top of our list. It was really hard to get her, but boy, are we so thankful to have her on our team.

Matt is too kind to me and we mutually chose each other. I would say that I think there was a clear alignment of values and of how we think about the world when it comes to venture capital from early on.

Okay, well, that's like a perfect segue into my next question, because I want to talk about the team that you're going to build here in Europe, because everybody, again, it's a question everybody asked me, like, how big is this team going to be in terms of, say, like investment partners? I mean, one person even said to me yesterday, if Sequoia is so serious, About Europe now, why are you only starting with, I guess, two, three investment partners? So do you want to tell me how big is the team going to be and what can we expect in terms of how that is divided between, say, investment, you've already just announced ahead of talent, right. Any other sort of operation or support that you're going to build out here on the ground rather than just relying.

On the U.S. so I'm happy to take that one, Steve. So one of the most important things of significance of us making the decision to hire a local team and open an office is at Sequoia. When we are in, we are all in. And we have opened geographies like China and India before, where we have become the most dominant venture capital franchise in those regions. And we are all in on Europe and our intent is to do the same. But we know from past experience that if we roll into a new geography and we hire a 20 person, brand new team, that that's a recipe for disaster. And the way we have set up Europe is this is an extension of the team that has currently been working together, based out of Menlo park in California. And we're slowly adding and expanding that team so that we have the ability to recruit really, really great people and have our culture permeate and our learnings as an organization permeate, so that this is a natural expansion of our efforts. And so we would rather take it gradually and hire outstanding people and slowly build up a team than roll up with 20 new people. But we are as committed as ever to building the dominant venture franchise in Europe. Just as we.

Go on with Zoom.

It'S always a little bit of friction. Apologies. You know, if I may add a personal note. Of course, as I was thinking through this opportunity, this was a big question for me and I became very quickly, very convinced about Sequoia's commitment to Europe and the fact that actually it took Sequoia a little bit of time to make this decision, I think, and the fact that since in the past decade Sequoia has not entered a new continent, I think it actually shows how thoughtful the we are as a team about entering a new geography and how committed we are when we do enter a new geography. If we think about the team, there was a conversation of mutual trust that we would figure out exactly what makes sense, which I think is the right way to think about it. And if you think about what success looks like for us, if we think five or seven years out, and if we think about the founders who are really changing the status quo, that come out of Europe. We want to partner with all those founders, we want to partner with those founders early and we're working backwards and we're thinking through what type of team it makes sense to build.

And Matt, you said if you built out a team of 20 from the GET go, you said that would be a disaster. And then you mentioned, you talked about Sequoia's culture. So just perhaps really briefly, I'm curious, why would that be a disaster? And how would you describe Sequoia's culture in terms and try to do it in ways that is actually tangible and not generic? You know what I mean? Everyone talks about culture.

No, totally. I'd say that this is a long term business where you build long term relationships of trust with your partners. And for you to have good partnership dynamics, you have to build and establish that, that trust. Because we're thousands of miles apart, but yet we're unified in mission and purpose. And to have 20 new people with the 20 person investment team here that's based in Menlo park, that would just be so many new voices, it would just be hard to integrate and adopt. And as we tell many of our portfolio companies, start small in the beginning and be incremental in your hiring. And that's absolutely what we intend to do in Europe is we want to start with a small elite team and then we want to add to it and add to it as we grow and expand so that we can make sure that our culture ties over. And then what is that? I would describe about the Sequoia culture? Like one is key element is trust. A second key element is that we like to work very closely as a team and we like to have really strong interpersonal relationships, which is another reason why we move gradually. Rather than being too aggressive, we like to, I mean, we have a huge culture of winning and a huge culture of company building. We view our investments as not as just investments, but as partnerships. And we talk about how we work with these companies as a team. And again, these are things that we like to teach and bring new hires into. And by moving slowly but thoughtfully with a long term vision in mind, we feel like that is the best way for us to get our start.

And if I could add to this, when I was getting to know Sequoia better, people always talked about teamwork and how teamwork was at the center of everything. And really it took me starting and actually seeing this in action to understand how much focus there is on teamwork. And I mean, firstly, just when George and I started here, the welcome has been overwhelming. Of course, I expected a very warm welcome, but I cannot emphasize enough the number of FaceTime calls, Zooms, WhatsApp messages we get constantly. People get up at all sorts of times of the day in order to chat with us, in order to help us think about opportunities. People work weekends. Whenever I call Matt or whenever I call any of the other partners, they pick up if it's 5am or if it's a Saturday or if it's a Sunday. The level of helping each other and teamwork and commitment has really been incredible and is incredible.

Absolutely. Okay, so I think I'm going to start putting in some audience questions, so we might jump around quite a lot, even more than I did. So I guess to start with, because we haven't really talked about what Sequoia looks for in companies or we haven't talked about the current kind of, you know, tech trend. So I guess the first question somebody put is which, like, what are the three things that you look for in a European startup to make it a good fit for Satoya?

I really wish, Steve, that I had a checklist of three things. My life would be so much easier. I could wake up later and go to bed earlier. It's not quite like that because we look for outliers and that means that outliers come from all sorts of backgrounds and think about the world in different ways. If I had to simplify it, I would say is the following. We look for founders who on the consumer side want to change the way that consumers live their lives and on the enterprise side want to change the way that enterprises run the business. We look for founders who want to build enduring and generational companies. And I wish there was a checklist and a check the box, but these founders and these companies come in different shapes and forms.

The one liner I like to use is we look for people who are hell bent on making a dent in the universe. And that grit, passion and ambition targeted at a large market opportunity is so exciting to all of us.

And how much this comes from someone claiming to be Sam Seed, which is another journalist, so I really shouldn't give him any airtime. He asked, how much capital do you expect to invest in Europe in the next three years? In other words, you've already said that it's the one fund. There isn't a separate secure Europe. But can we get an idea of how much capital you plan to deploy in the next three years?

So the answer there is we don't know. We don't make allocations as to how we will deploy our funds and we don't have set time horizons under which we deploy our funds. We have some funds that we've invested more quickly, we have some funds that we've invested over a long period of time. We look for the best opportunities across this landscape of what we call the west of Europe and the United States and a little bit of Canada. And we will make investments in the best opportunities we see as we see them. And there are periods when there are lulls in our business and there are periods when it's very, very active or where it may be more active one place than the other. It's hard to explain those, but we are excited to invest in great companies. Over the last three years we've invested $400 million in opportunities in Europe. So if that might be the future, who knows? But really we just want to invest in the best companies and we're in a fortunate position to always have the funds to be able to do so.

So somebody else asked, obviously I gave you a kind of a hard time about doing seed and signalling and you know, I noted that a lot of the seed deals don't seem to be announced. So it's it. Someone's asking me if, if you ever going to do like even earlier than seed. And even if we try to, it's hard sometimes to define seed, pre seed or whatever, but they also want to know do you ever invest in kind of idea stage, in other words, as you go earlier, what proof points are you looking for and how early may you eventually go?

Should I take this one, Matt?

Yeah, go for it.

I mentioned before, our tagline is from idea to IPO and beyond. We love intersecting founders as early as possible. We love being there as they're shaping their thinking, as they're figuring out their product market fit. And at the end of the day, at any stage, and in particular at that stage, it's about people.

And switching subjects Again, Covid or the coronavirus pandemic, Obviously we've always talked about this a lot. Anyone who's done any events in the last six months. But how does the coronavirus or pandemic and the so called new normal, how has that changed the way Sequoia is thinking about investments in general? And also it's kind of, it's funny timing, isn't it, right that you're coming to Europe in this completely sort of disrupted, you know, time of our lives. And I gather that, Matt, you're moving to London, is that right? And you haven't been able to.

That's right.

You've had to delay that because of the coronavirus here. So the question is, how is the coronavirus or the pandemic change the way you're thinking about investments going forward?

The way we look at it is the pandemic is hopefully a two to three year disruption, and we are making an investment in Europe that we hope to yield dividends over decades. And so there is never a perfect time. We obviously started this process pre pandemic, and I had planned to be there on the ground now, but I have young children and with all of that dynamic, we felt it was better to wait until there was at least a vaccine or some breathing room. So I'm hoping to be there this summer. But there's been a lot of interesting things that the pandemic has done that have been a huge positive, like I'd say, for collaborating and working more closely across the team in Menlo park and the team in London. It's been great to have Zoom as a civility where everybody is on Zoom versus a conference room full of people and two or three people dialing into the conference room. It's been a really nice experience, I think, to onboard and give us a really great foundation to start as a team. And it's also been great because we've been able to get the full team engaged quickly in the opportunities that Luciana is surfacing from being there on the ground. And so she surfaces a super exciting opportunity and boom, we can get the whole team on a Zoom really quickly. And that is much more acceptable today than it was a couple years ago where you needed to go fly and be in person. I think there's been a lot of benefit to the business from the dynamic of us all needing to be remote and work from Zooms as well as there's been headwinds, obviously. And as far as our investing appetite, it's the same thing. As I said earlier, we feel these are opportunities measured in decades, not in years. And so we are just as active investing now as we were pre pandemic.

And what I would add is we're trying to still make it as personal as possible over Zoom. So we'll do these things called suppers with founders and we'll send a little package and we'll have the same meal over Zoom. And we try to be creative to still make the connection as personal as possible, although it's through a screen like now.

Sounds great. I had an event, they sent me lunch. I didn't in the end make it to the event and the food Sucked. So, yeah.

Oh, I was hoping you would say it, but the lunch was great.

I thought I was so clever, but that sounds great. I mentioned earlier about the competitive landscape with, you know, with a very big brand American fund coming. Coming to Europe or doubling down in Europe. As I say, we keep saying coming to Europe, but you guys have been here for years and years actually. But somebody asks, it's known that there's a couple other big American firms are setting up or putting feet on the ground here. So just more broadly, what do you think will. What do you think the biggest effect or how it will change things if there's a much bigger influx of US capital into Europe? I mean, we're seeing it already, but sort of not just the money, but also, as I say, personnel.

I think it's great. I think it's a really good thing for the ecosystem. I think it's great for founders and I think it's great for us. We respect our competitors, we like having great competition. I think it's a really good thing. And also I think it's inevitable. The ecosystem is evolving. There are more and more really interesting companies and great founders coming out of Europe. So of course it's a balance between opportunity and capital. So I think it's a really good thing.

And somebody else asked about different sort of regions or tech hubs in Europe. I think it's a really good question. So which sort of tech hubs are you most excited about? And I suppose not just like the usual suspects, but even some ones that are more off the beaten track.

I know which one Matt is excited about. Do you want to talk about that? And then I'll share.

My favorite is, personally, Stockholm. I lived in Sweden for a couple years when I was younger and I love every chance I get to go back to the Nordics. But look, the tech hub dynamic is one of the most exciting things about investing in Europe, because an amazing company can literally come from anywhere. And that's very different than how the market has evolved in the United States. In that, yeah, there are some tech hubs and you can get a company from anywhere, but there is a ton of aggregation in Silicon Valley and New York and then maybe a little bit in pockets like Seattle and Utah. But there is tremendous diversity in the European landscape. And so each ecosystem has its pros and cons, but mostly pros, and we enjoy spending time across all of them. I don't know, Luciane, if you wanted to add more.

Yeah, I think the usual suspects are the uk, France, Germany, Nordics, and I Shouldn't put all of Nordics in one because obviously there are many hubs there as well. I'm from Eastern Europe, so I'm very biased, but I've always been a big believer in the talents there. I've been fortunate with the, with my Eastern European investment so far and I do expect there's going to be more good stuff coming from there as well.

So somebody asked about sort of diversity and inclusion and specifically how Sequoia thinks about sort of encouraging and supporting their startups or their investments to think about D and I issues.

I think the industry is not where it should be yet. I also think that for the past few years we've been having the conversation and that's great. And at Sequoia, this is really, really important to us. So this is something we'll focus on. I like that. I see that founders are focused on it already in Europe in general, the way that founders think about building their boards and think about building their businesses. So while we're not there, I think it's really good that we're having these conversations and this is the starting point for change.

Just to push back on that a little bit. For years we've heard sort of coming out of Silicon Valley, this sort of idea of pattern matching. Right. Like two guys in a garage went to Stanford, blah, blah, blah. Right. And even in the uk, certainly a lot of founders seem to look and come from similar educational backgrounds or they, you know, they typically went to Oxbridge, they did a stint of McKinsey. And I'm thinking that sometimes doesn't really tally with this idea of looking for outliers. Right. It's like a mismatch. So I just wondered how you think about that sort of this over reliance on quote unquote pattern matching and how that kind of goes against diversity.

I would respectfully push back on you actually, because about UiPath, I think that's a great example and it's a good example because I was on the board and an investor in Sequoia as well. It's partly how we got to know each other. If you look at Daniel's profile, who has done a phenomenal job and I think is really an inspiration to the next problem of enterprise entrepreneurs. Norse in Europe, he studied mathematics at the University of Bucharest. He spent a few years at Microsoft, to be fair, in Seattle, but then he had been back in Bucharest for 10 years by the time that he raised any venture capital. So I would actually, I would push back on that. Yeah.

Okay. Maybe that's the exception to the rule, but I'm obviously talking from quite a London centric view, I suspect.

Yeah.

I would just add, Steve, we want to find the great opportunities wherever they are. We know we can do better. We are constantly challenging ourselves to be better. We are working on this. It is a big problem and a big focus area for us. But we are absolutely not locked into the. You have to go to Stanford to be somebody we fund and we want to find the great opportunities and the great founders wherever they may be and from whatever background they may come.

Do you think you sort of alluded to this? Do you think the fact that everybody's moved towards kind of remote working and is more, you know, more amenable to using Zoom and, you know, how does that change sourcing? I mean, people have said, I used to get loads of press releases, right? People saying, oh, we did this deal and it was completely done remotely. But when you look into the detail, often people have met up in person prior to that. You know, it started before the lockdown, if that makes sense. So I guess my question is a very long winded one is how does this remote way of working affect both your deal flow, getting a deal across the line, but also surely it opens it up to being even more distributed and therefore you can find these pockets of talent from, like you said Matt earlier, from anywhere. Right.

I think it's a positive for founders and it's a positive for us. It's a positive for founders because founders can take more investment meetings from the comfort of their office quickly and efficiently via Zoom in the early days and in talking and getting to know people and they don't need to go and go visit, go fly to London to go visit a bunch of firms. We just have these conversations quickly over Zoom. And I think it's great because it's also enabling us to have a much broader reach to make sure that we can communicate with the founders in the smaller geographies where we may not have had a trip or an ability to go get there in a short period of time and so I think that's a great equalizer and a great opportunity for founders and it's great for us. I do think that when you're entering into a business relationship that you are going to be partners for a decade or more, that there's a lot of value to being in person. So even in the COVID world, we try our best to have some sort of interpersonal interaction if we can. We have definitely made investments where we have not met the founders in person at all during this Period. But we also are doing socially distanced walks with masks and, you know, trying to have those personal relationships because it just matters. And we think post the pandemic, that element will return. But the nice thing is that Zoom has now become a standard part of our practice and operating. And I think it will be a huge net positive for early meetings and early interactions and hopping on the phone quick and having a quick interpersonal dialogue where that may have been more challenging before.

And Lucianic, I've wanted to ask this for ages. How was UiPath? I don't want to use the word discovered, but they were slightly off the beaten track. I understand. And I think one of the early investors is the VC company that invested in my completely failed attempt at a startup.

Is that true? Which one?

I think so. I think I'm right. Credo Ventures.

Absolutely. Yes. They're great. Yeah, they're great.

I'm so glad because I lost them so much money. So I'm so happy that they got in on UiPath.

I think they're doing great overall with UiPath. It was an introduction from their other seed investor from Early Bird, whom I'm very grateful to for this introduction. And I still remember my first conversation with Daniel, and it was quite early at the time, and from that day and from that conversation, it was very clear that he was thinking on a really, really big scale. And I like to bring up this example whenever people say, oh, are European founders ambitious enough? Yes, yes. Look at some of these examples. Even early on, when it wasn't clear that robotic process automation would be a massive category, he always, you know, shooting from the star for the stars was his attitude. And he's done. He's done really, really well.

Absolutely. And just, I mean, the other thing we haven't really talked about is how Satoya views. You know, I did that early quote from Michael Moritz, fairly or unfairly, but obviously there is a different culture and a different kind of macro environment in terms of Europe's relationship with regulation. And obviously, and even arguably the culture of perhaps the way we think about certain issues around. I don't know whether it be the environment or kind of the way companies are organized in Europe is arguably different from Silicon Valley. So I'm just wondering what are the strengths in Europe or the things that make the Europe ecosystem different from Silicon Valley in a good way or. Because we always talk about the negative. You know, like people used to say, you know, European founders aren't ambitious enough. They don't think they're going to be enough. Obviously that's completely changed. But what are the sort of. What is the cultural element of European startups that's different from the Valley?

I think that. Oh, sorry, Luciana, go ahead. This is the challenge with Zoo. Sometimes there's this lag, but I'll go. And then you should go, Luciana. I think from my perspective, I think of it like one, the quantity and quality of computer science graduates. Three of the top five computer science programs in the world are in Europe. And the quantity of great people coming out of Europe that are able to contribute to these companies is very high. And so I think that that is a huge differentiator. I think that, number two, the European technology scene is a scene that is filled with people that tend to be more loyal and so they tend to stick with companies longer. And so there's less of this switching back and forth. Like here in Silicon Valley, it can be really competitive that you're here two years and then you're looking at your options and starting to look at what else may be out there, because it can be very transactional in nature because there's so many companies in one place. And in Europe, where it's a little bit more fragmented, that leads towards people investing more time in one company, which I think helps make it easier for those companies to scale. And I think that the European perspective is opening up new categories that were never previously envisioned in the United States, like process and automation and process mining. Those are like European innovative categories that are tens of billions of dollars of available market globally that were driven by insights that came out of European universities. At least in the process mining case. I think that that's very differentiated and you can argue the flip side of the coin on the regulation and that the regulation dynamic in Europe has allowed for this incredible fintech ecosystem, where I think there's been a lot more innovation in European fintech than there's been in the United States because of the laws have allowed that. And so I think it can cut both ways. But Europe for sure has this huge balance sheet of strengths of opportunity over the companies that are based here in the Valley.

And what I would add is the fact that Europe is not one unit. You have many different countries. It's more difficult, but also because it's not trivial. Right? Especially for consumer businesses. You start in the uk, you go to France, you go to Germany. It's not just about translating Europe your app, it's really about adjusting your offering. And the fact that you actually have to do that early on, I think helps you build a great playbook so it's a bit harder early on, but you also get better early on. So it's a blessing and a curse.

I think we may be out of time almost, but I'm not seeing any alerts here. I just want to ask one really other quick question because you're on my list. It sort of relates to this. It's a bit micro. Employee stock options at European tech companies. I've heard this recent debate, like some people say it's too low in Europe. So like, because European employees don't value stock, they don't necessarily think stock is worth having because we haven't seen enough really big exits for employees and stocks. So there's been a sort of debate. Some firms say it should be 10%. Some firms, some VCs say that companies should allocate more at 20%. So I just wondered, does Sekoro have a view on that debate? Do we not give enough stock away to employees in Europe?

I think we have a lot. I know that we have a philosophy that we should always pay people well and have a high bar of expectations on execution and give the people the opportunity to benefit from these investments. Every market has different levels at which you the market price to compensate people. But that is changing as we move to a world of more remote work, as we move to a world of more and more global competition, we feel that wages and options and compensation will equalize. And so we always have this emphasis on pay for the quality talent. Pay them well, treat them well is the narrative that we try to encourage our companies but be prudent to the market dynamics to build a strong, enduring business. It's a balance to try to say, I don't know, Luciana, if you had.

A different perspective, I think you're right. I think I will say in my experience with European companies, founders think in a very international manner and they're really focused on getting the best people. And getting the best, best people in Europe also means being generous when it comes to options. The other thing we're seeing more and more in Europe is giving early employees some liquidity with time. And I think that's a good habit as well, because people start feeling and realizing, okay, this is not just paper money, this is real money. So I think the world is normalizing.

By the way, I just on a side note, I'm noticing all of the Romanian love coming in on the channel chat streak that post Covid we have to do a big event in Romania because this is awesome to see. So much love.

I love it. I hadn't even seen yet. I love it.

So I think I'm not getting a message say we're out of time. So I'm going to ask one more question. Secondary rounds. So I'm seeing this over the last few years that a lot of companies are raising money, but they're letting early shareholders sell some shares or all of their shares to an incoming investor. And this used to be something that would happen very, very late. You know, maybe, I don't know, series cde, but it seems to sometimes be happening earlier. And in my experience, you get two kind of opinions from venture capitalists on this. Some people say it's great and other people say it's far, far too early to let people cash out. So, yeah. Do you have a view on that, Luciano?

I would say it's really case by case. So I would not opine as a general, yes, it's too early or too late. But what I would say is, as I mentioned before, I think giving people a little bit of early liquidity, whether it's early employees or whether it's the founder, I think can really give the opportunity to take this for another decade and to really be incentivized and de risk people's personal situation for a really long period of time. And it can encourage founders to really go at it and shoot for the stars. And I think that's great. I think that's a good thing.

Right? I think that is it. That was fantastic. I feel like we got through, like we dispelled all the myths and that's why we're here.

Thank you.

I really think we did, Steve. And I think based on the things that Matt and Luciana said, I think one way to wrap up kind of like what Sequoia is looking for from Europe is kind of like what Sir Michael Moritz said at last year Slush, that the best companies are the creatures of founders obsession. Is that right? Is that a good way to kind of like wrap it up, what you're looking for?

Absolutely. And we couldn't be more excited to be here and to continue that investment.

All right, thank you so much, Luciana, Matt and Steve for the great session.

Thanks for having us.

Thank you.

Bye Bye.