The European Start-Up Community: Luciana Lixandru, Sequoia Capital

The thing that gets us excited every day is delighting our founders and building a founder community where they can thrive and where they can learn from each other.

Hello and welcome to Now Then 10 with me, Brent Hobman and me, Nicola Mendelsohn. In this series, we'll welcome luminaries responsible for creating and nurturing communities across the worlds of business, technology, culture and more. We'll explore the now how change makers are building some of the most influential communities in the world.

The then how our guest leaders have been inspired by past movements and people from history in building their communities.

And finally, the 10 fast forwarding to 10 years from now. What do we want our future communities to look like and how can we spearhead them? Welcome to Now Then 10. Venture capital is a topic that's come up frequently in our conversations with leaders on the show, whether it's Maria Raga raising $100 million for Depop or hearing from the hugely successful Syria entrepreneur Marcia Kilgore on her decision to seek venture investment for the very first time last year. That's why we've decided to take an in depth look at the venture capital community for this week's episode of Now Then Ten. And I was absolutely delighted when Luciano Lichandrew, European partner at Sequoia Capital, agreed to be our guest for the episode. Sequoia Capital, as most of you will know, is a world class venture capital firm that's backed some of the top community driven companies globally, including of course, Airbnb, Uber, YouTube, Reddit and Instagram. The firm was born in Silicon Valley and put down route here in Europe in 2020 with Luciano at the helm and as its first European partner. Luciana has over a decade's worth of experience as an investor and was described by the firm as one of the brightest stars in the European VC ecosystem. She famously led the series a investment in Romanian robotic startup Uipath and was previously a partner at Excel, where she was known for early investments in food delivery startup Deliveroo and virtual events platform Hoppen, which have quickly become household names. So welcome Luciana. Thank you for joining us. It's great to have you on the show. I know you're going to have a lot of top advice for founders, so let's dive right in. We like to start each episode with.

A quick fire round.

Are you ready Luciana?

I'm ready.

What's the best advice you've ever received?

Oh, smell the roses. Let yourself smell the roses along the way. These journeys and ventures are so long, you have to smell the roses.

Great what does success look like to you?

That's another hard question. Happiness.

If you weren't doing this job, what would you be doing?

I'd be a high school math teacher.

What makes you feel like you belong?

Being part of a community, having each other's back in a community, that's the best feeling of belonging.

Name three things that make you happy.

Well, I have to mention my husband, of course. Travel, family, the usual. We're all simple at heart and helping.

Amazing entrepreneurs, I guess.

Of course, of course.

So to kick things off, you know, the tech ecosystem superbly. Tell us about what this move means for Sequoia. What most people don't seem to realize or talk about is that Sequoia has in fact been investing in Europe for quite some time.

Brent, thank you so much for inviting me and thank you so much for the kind words. I'm thrilled to be here. As you rightly say, we have been investing in Europe for over a decade now. We've been long term investors in companies like Klarna out of Sweden and UiPath, which is how I got to know Sequoia, and companies like UNITI out of Denmark. So we have a long history of finding like minded entrepreneurs in Europe who want to build global businesses and partnering with them. I think it was a natural move for Sequoia because we were getting pulled more and more into spending time here and there is just so much, so much interesting stuff happening, great entrepreneurs, really interesting ideas and yeah, founders who want to start in Europe but build local winners and those are the type of companies we want to partner with.

I'm curious to know why you've chosen London as your European home base.

Well, because we're early stage investors at heart and we want to partner with these founders early. That's when we think we can add most value. We can roll up our sleeves. We think of ourselves as company builders, not investors. So we want to find these founders at Seed, at Syriza, and then work with them for a really long time. And the best way to find these founders in Europe early on is to be on the ground. And the best way to help them on the ground in Europe and in the US is to have a, quote, unquote, a dual office, if you want to call it that, a dual local presence between London and California.

I also want to ask you about a recent tweet that you posted saying it's never too early to come to talk to us. What does it mean when you say that you invest at the idea stage?

It's a continuation of Our strategy? We want to partner with founders at Idea Stage. Seed companies that partner with Sequoia at Seed Stage are four times more likely to raise a Series A than an average seed company. So we've been in the seed business for decades. We've been in the seed business since the beginning. It's not a new strategy. Some seed investments in the past are businesses like Airbnb, businesses like Stripe, Nubank in Brazil. Apple was a seed investment. We tried to track all the people that we think are great in the ecosystem. And as you can imagine, in the US it's even harder than in Europe because the ecosystem is that much more developed. But we track people that our network thinks highly of, and we try to already catch them when they start thinking about starting a company, not when they start the company already. That's one way. We, of course, use data science. We try to add magic through various data channels and various referral channels. Now, what I will say is that while that's very helpful to make sure we're talking to these companies early, at the end of the day, the magic needs to happen between the founder and between the partner. You need to think about the world in a similar way. You're agreeing that you'll be working together for the following 10 years? I don't know. It depends. It's a really long journey, especially at seed. I Mean, Airbnb at IPO, it had been 10 years since our seed investment DoorDash had been eight years since our Series 8. These journeys are very long time in the making. So I would say that the magic happens when there is that spark. You have a conversation with a founder and there is that spark and that excitement that you see the opportunity in a similar way. And you, as an investor, want to become a small part of the journey of building an enduring company. I think that's while data helps find these companies early, I think that's where the magic happens.

Today there are more European unicorn companies than ever before. This means there are more top founders on the scene to support the next generation. I'm curious to hear your views on the European talent we're seeing today.

So, the way we think about it, of course there are some key hubs. London being probably the key hub in Europe. Right. It's a great tech ecosystem and I think it will continue being one going forward. Paris, I think, is great. Stockholm, Copenhagen is a really up and coming brand. I don't know if you're spending any time there. Berlin, of course. You know, I've been in the European ecosystem for A decade. And I remember how things were even five years ago. And the sheer number of opportunities has increased a lot. But also the number of high quality opportunities has increased a lot, which is fantastic. So many talented people starting businesses and so many talented people joining startups in Europe. The beauty about Europe is that there is a lot of technical talent. It's not concentrated just in one country. So no matter where you are, you should have access to very, very strong engineers. And now, because there is also more of commercial DNA, because people have traveled this journey with scale ups like Deliveroo, like Spotify, like Adyen, like transferwise, like UiPath, and the list goes on, I think that combination will be magical. So I'm very excited about what's to come in the next short to medium term in Europe. That being said, I think that great companies really can start anywhere because everything is digital now. As I mentioned before, I think there is access to local technology talent. So I'm a big believer in the fact that the next big thing, whatever that is, can start outside of these more obvious hubs. I mean, one of the founders that I loved partnering with also at Series A, was the founder of Miro, the online collaboration tool. And they started in Perm in Russia. Again, not an obvious sourcing hub for venture capital. And they created the category leader in the space. So we really think greatness can start anywhere.

So it used to be in the old days when there was less competition, you could sort of just and less knowledge around, you could just invest to take a check. Now it's like you have to prove to the founder you are going to be the most helpful investor and partner, as you guys put it, as well.

Through the journey as you should. It's a big decision for any founder to choose a partner. They choose someone they'll be in business with for a very long time. So as we should as investors, we should prove what we can do and we should roll up our sleeves.

Absolutely. So looking at early stage entrepreneurs today, what are the secrets of pitching a great fund like Sequoia?

Firstly, be authentic. I know maybe it sounds difficult in practice, it sounds silly. Just be yourself. It's all about forming a human connection and talking about how you could work together to build something great. And the best way to have the conversation, the only way to have that conversation is to be authentic and be true to yourself and be true to your vision.

Do you make the decision super quickly when they pitch you? Is it five minutes or do you delve deeper?

Thinking fast and thinking slow? Right. So that's A great question. And how we make decisions is one of the most important things in our job. Right. I can only speak for myself because I really think for every investor, it's really personal. For me, it's a little bit of what you say. It's definitely a gut feeling. You have a conversation with someone and you connect and you think, wow, what they're trying to do makes a lot of sense. And if the stars align, you let yourself dream a little bit with the entrepreneur. Right? The stars align. This could be the type of enduring company we really want to work with. So there is that initial connection, gut feel. I don't know what the right term is, that initial spark. And then step two for me is to then take a step back and think a little bit more rationally about the cold facts and maybe if there is a product, understand the product, if their users understand what the users think about the product. If there are numbers, if there is revenue, look at that. Or let myself think a little bit about the market and how it might evolve. So for me, it's really a combination of instinct and then doing your homework a little bit and the best decisions I've made. And again, I speak for myself because every investor thinks differently is when those two things align. I will also say we work as a team and before joining Sequoia, I mean, I say this half jokingly, half serious, but Sequoia told me all the time they're very team driven. And you know, I was a bit like, okay, everyone is team driven. And then I joined and then I realized quite how team driven Sequoia is. And it's reflected in everything. It's reflected in the fact that of course there's one person who represents Sequoia on the board of a company. That being said, that founder spends time with the entire team. So we made one investment in a series investment in December in Germany. That founder has already spent time with my partner Bill, who ran engineering at Google, my partner Bogomil who ran product marketing at VMware, my partner Carl, who ran go to market at VMware as well. So really the teamwork with companies in particular I think is amazing. The other area where this is reflected is in the fact that we decide as a team. We have of part partnership conversations, we try to seek the truth together. We encourage each other when we see greatness and there is any hesitation, we push each other when we don't understand each other's view. So we have those sort of like very honest intellectual debates. And I love that.

So it sounds like A great culture and you've managed to take the politics out of teamwork.

I love it. So far, so good on the show.

We believe the community is incredible, powerful driving force. How does Sequoia think about community?

We thought very carefully about the communities that we want to build and of course the obvious one. And the thing that gets us excited every day is delighting our founders and building a founder community where they can thrive and where they can learn from each other. Now, we actually signed a 10 year lease. I joke that we're the only people who are signing these long leases. Everyone else is giving up their office, but that's how committed we are to Europe. So we have two floors and the entire floor is something that we call our community room. And that is an open space where I'm hoping that Friday evening after work people will come for good conversation and for drinks to relax after a hard week at work. So I'm really, really excited about that. And last but not least, I think we really can't underestimate the investor community in Europe. And I say this because I think it's quite nice that the investor community in Europe is not massive yet, it's still relatively small and you have different funds that focus on different geographies. So I think there is an opportunity for us to work with each really nicely together. And of course we're frenemies. We're always, sometimes we'll compete, sometimes we'll work together. You know, I'm realistic, don't get me wrong, but I really think there is an opportunity to collaborate. Especially if you think about it, greatness can come from anywhere. I mean, UiPath is the best example. A company that started in Romania, who would have thought? And you know, what a journey. But I think for us in particular, partnering with local investors who know their local geographies well just makes so much sense. So all this to say we also really want to invest in this investor community. And you'll hear from us, Brent, on various programs and various initiatives that we're starting.

It's going to be very exciting. I think that the buzz and the energy, I can't wait till when we get people back together in person.

Can you imagine? Yeah.

To give our listeners a chance to get to know you better, we'd like to hear about some of the life experiences that have shaped your journey and hear about some of your biggest influences. So going right back to the beginning, can you paint a picture and tell us a bit about your upbringing in post communist Romania?

I was very blessed because my family emphasized Education a lot. And my family was always very supportive. If you ask me, to this day was the hardest thing I've done. I will probably tell you, it's high school in Romania. You start class at 7am it's like the military. You study constantly. It was pretty intense. But I enjoyed my four years. I had really good teachers. One of them in particular, he's very, very tal. He trains the International Olympics team in math for Romania and he suggested Georgetown to me. He had spent a summer there. I had never heard about Georgetown. I applied to a few schools and I was just very lucky. I got a scholarship and that's how I ended up there. And I don't know if as a parent from a small town In Romania, your 16 year old child tells you that they want to go to the us. No one in my family had been to the US at the time. I had not been to the US at the time. I'm just very proud and very grateful that my parents reaction was wonderful. What can we do? How can we help you? So that was the most important thing. Georgetown was eye opening socially and academically. I was a math person. I ended up doing two majors, one in math, one in economics, to do something more specific to the school. But I had a great time.

We like to ask guests on this.

Podcast to share a moment or a person from the past that's been influential.

In shaping their lives.

Is there a specific person or event that has inspired you most?

I would have to say my father because he traveled many entrepreneurial journeys himself. He was an engineer by training. When communism fell, he tried to start with a clean slate and tried to start all sorts of businesses. He had a shoe store, he had a small bakery. So he tried many, many things. So I have to say that when it comes to, you know, appreciating the entrepreneurial journey and what an impact it can have on someone when things go well and when things don't go well, that really shaped me and that really gave me appreciation. As much as you can have without having done it yourself. But for what it's like to give it all blood, sweat and tears and to risk everything you have in order to start some sort of business that might or might not be successful. So if I had to choose one person that impacts the way I think about my work, I would have to say it's him. And he always encouraged me. So I'm grateful for that. I would have to say it's him.

Great. No, it makes, I think those family influences, we're very lucky, you And I both to have had them. And in my case, it was my father.

Absolutely.

And my grandfather built one clothes shop into 650. And I just remember watching and learning how much he loved what he did every day. People often think that we do this sort of stuff. Money is the motivator, but money is the side effect, right, of doing something you love every day and being passionate about it.

That's really nice brand. That's very nicely said.

So the other thing that you and I both share is being immigrants, Right. Despite my English accent, I'm actually originally from South Africa, so an immigrant as well. How do you think that being an immigrant has shaped you in this tech world?

I hope it gives me that little extra level of appreciation for how difficult it is to go to a new country and start from zero. I can only hope, you know, for me it's the only life I've ever known, so I don't know, I can't compare. At Sequoia, we talk about just partnering with founders from all sorts of paths of life, partnering with the underdog, partnering with people who might have ambitions that sound crazy in the moment, like that's how we think about the world. So I can only hope that it gives me that little extra of appreciation for different backgrounds, different paths, how hard it is to go to a new country in order to start a business or join a startup or even to study and find your way from there.

I think there is an immigrant's motivation of a mix of drive and insecurity to prove yourself that sometimes people who are too comfortable don't have.

There is definitely an element of appreciation and respect. And actually, if you look at our team, at our US based team as well, many people come from different places. I mean, Dag Leoni himself is from Italy. He talks about how he landed in the US on a boat. He talks about this quite often and how it really shaped him. A lot of our team has that background.

So talking about someone who sort of made it from an incredible entrepreneurial journey is a Romanian born company who you found and charmed early on. UiPath, I think, is now valued at 35 billion. How do you feel about seeing somebody from your native country do so well?

Honestly, I have goosebumps. It's just such a privilege and such an honor to have partnered with him at Series A, to have worked with him for years and just to have seen the journey and the evolution and you know, I was thinking before chatting to you, I was thinking it would be easy to sit here and say it was so obvious things would go so well. But I think things went so well because every single day they made the right decisions and, you know, it compounds. And again, from the outside, the journey to building a big company and the journey to success may look easy from the inside. It never is. Even the most successful companies have ups and downs. And I just think, yeah, I'm incredibly proud of the fact that they built a platform company, a category defining company, a company that I think will be around for decades. And I think we'll be talking about them in 20 years from now because they're just so focused on what's next and so focused on thinking three steps ahead. Honestly, it's just been a privilege to see them execute. It's been a privilege to see what they're doing for the European ecosystem. I have founders who come to me and say, well, I'm encouraged because they could do it, so maybe I can do it as well. I mean, I find that incredibly touching. And I think by doing what they did, yeah, they gave back to founders, probably more than we realized just by inspiring them. So I'm just thrilled.

So now, looking at the last part of our conversation, we're going to move to the future and where you're hoping to see the world ten years from now. So looking broadly at the world of venture investing, what will it look like in a decade from now?

The honest answer is, who knows? Things have changed. I mean, I'll give you another proper answer as well. But really, who knows? I think of where things were five years ago, seven years ago, and it was really a different world in Europe. And I think things have changed for the better because there's just more talent, there are more founders who decide to start a company as opposed to joining a corporate. So there's just a lot of good stuff happening. I will say these journeys, these entrepreneurial journeys take a long time. And the way we think about the world is we like to partner with founders who build enduring companies, who build companies that will be around in 10 years and 20 years and so on. If you think about journeys, like I mentioned Airbnb, you know, this was a tenure in the making to ipo, which is just a milestone, by the way. From here, we continue working with a company, we continue staying on the board of the company. Doordash is the same. It was an eight year journey. These entrepreneurial journeys are really long. It takes a long time to create a category or to dominate a category. So what I hope is that we just raised another seed fund. We continue being focused on The US we are even more focused in Europe than ever before. So I Hope that in 10 years from now, the seeds that we're planting today will be some category defining companies that have European roots but are winning on a global scale. I always have a slight bias for the European ecosystem, having been based here for my entire career. I'm hoping that more and more of these platform companies will start here, will build teams here, and will win on a global scale. And I hope that's what the technology world will look like in 10 years from now.

Yeah, I mean, and there are some trends that people have said about venture years back that it would change totally. Right. So we look at crowdfunding. Angell list. So people were saying the venture model was sort of dead a long time ago. It seems stronger than ever with European venture funds outperforming US venture funds.

How important are these figures in inspiring future founders?

You know, Brian, the way we think about ourselves is we try to really be company builders. We try to work with our founders, not just be investors. And we'll try to innovate and we'll try to get better at this and delighting our founders. So one thing that we started talking about publicly last year, for example, is our company design program. We try to distill our tribal knowledge built over the last five decades of investing and working with businesses like Apple and Google and Zoom and Stripe. And we try to take those learnings and put together. It's a three week program, 45 hours, just for our founders. And the purpose is twofold. Firstly, it's small founder cohorts that get to know each other really well. And secondly, and importantly is the content and the sessions that we have on telling your product story, on building your culture, on go to market and the list goes on. So that's one thing that we have been doing for some time. We invested a lot of time in figuring out what the right formula was and we just started talking publicly about this last year. But that's one way to try to help our founders. So we think of ourselves as company builders. Everything we do is to delight the founder. This is just one example. In 10 years from now, I think we'll think of ourselves in the same way. We'll try to innovate along the way and figure out more ways or better ways to help our founders. But I would say we don't just think of ourselves as investors.

Luciana, thank you so much. It's been wonderful to have you and to learn more about your personal story and your journey. It's been fantastic to chat about some of the trends we're seeing in venture capital. Your insights, the greatness can truly be found anywhere and giving us a closer look into how Sequoia thinks about building its communities and investing across the spectrum and more in Europe. If you've enjoyed today's episode, then help us spread the word by sharing the podcast with a friend or a colleague and leave us a review. Next week I'll be passing the mic once again to my fabulous now then ten co host Nicola Mendelsohn. Until next time.