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Recent reports have revealed that longtime Sequoia Capital partner Michael Moritz has passed away.
After 37 years, Moretz is redirecting his efforts toward Sequoia Heritage, the wealth management firm he co-founded in 2010.
With over $15 billion in assets under management, the fund will become his primary focus, and includes a large portion of his family’s foundation, Crankstart Resources.
For a smooth transition, sources confirmed that Moretz will remain on the boards of several Sequoia-backed companies, including Stripe Inc., although he is no longer involved in day-to-day operations.
Missteps in investing in cryptocurrency lead to departures
Sequoia Capital’s venture into the cryptocurrency market resulted in some major setbacks, prompting investors to leave.
Venture capital invested in FTX, a cryptocurrency exchange that collapsed, resulting in a whopping $214 million loss from the Global Growth Fund. Although the loss is a small part of the company’s total assets, it affected Sequoia’s reputation.
Some important individuals involved in cryptocurrency investments are leaving the company. Among those leaving are Michelle Fradin, who was instrumental in investing in FTX, and Danielle Chen, who is associated with the “crypto maxi” community. In addition, Qais Khimji, partner focused on later stage companies, and Mike Vernal, senior partner with an extensive portfolio, will depart.
Geopolitical pressures
Sequoia Capital announced in June that it would separate its operations in China and India from those in the United States due to rising geopolitical tensions between Silicon Valley and China, which led to a divergence strategy.
Sequoia Heritage is spun off as part of this split, with Michael Moritz serving as a limited founding partner and board member.
Lawsuit regarding FTX promotion
Cryptocurrency investing woes escalated when Sequoia Capital, Thoma Bravo and Paradigm faced a class-action lawsuit filed by investors.
The lawsuit alleges that these entities furthered FTX’s legitimacy through marketing campaigns, even as the cryptocurrency exchange eventually went bankrupt.
Investors claim that the defendants’ consent gave an “air of legitimacy” to the stock exchange, which led to significant financial losses.
