Sequoia Capital Shrinks Crypto Fund from $585M to $200M
- The company said it repaid almost $15 billion to investors over the previous three years.
- The $214 million loss on an investment in the insolvent FTX was a major setback.
Venture capital powerhouse Sequoia Capital is said to have reduced the size of its cryptocurrency fund from $585 million to $200 million. The tech-focused VC company reportedly informed investors in March that it will cut the size of its Sequoia Crypto Fund and ecosystem fund to better reflect shifting market circumstances, as reported by the WSJ on July 27.
Given the current crypto sector volatility, which has removed many of the possibilities to support bigger firms, the cryptocurrency fund will now concentrate more on funding early-stage entrepreneurs. According to the sources, a further motivation for the reductions is to make it easier for investors to participate in Sequoia’s fund offerings by lowering the required capital threshold.
Internal Restructuring in Progress
Moreover, the company said it repaid almost $15 billion to investors over the previous three years. The $214 million loss on an investment in the insolvent FTX was a major setback for the company in recent years. The reported decision by Sequoia is indicative of a larger trend among VC companies to reduce their crypto exposure.
The firm is following the lead of other companies in the industry and making preparations to reorganize. The recent layoffs at Sequoia Capital’s talent operations section are indicative of the ongoing contraction in the Silicon Valley startup industry. It laid off 7 personnel from its talent operations staff.
The corporation is redistributing resources and taking other steps to weather the economic storm, other than laying off workers. The venture capital business has begun an internal “restructuring” exercise that will last two years.
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