VC Giant Sequoia Remains Optimistic About Crypto

[ad_1]

Alex Dovbnya

Despite recent market woes, Sequoia remains bullish on crypto investments

Despite the headwinds facing the venture capital industry and its portfolio holdings, Sequoia Capital remains optimistic about its cryptocurrency investments. Alfred Lin, Sequoia’s first partner, said this week that the firm would remain committed to investing in crypto, Reuters reports.

Lin says the venture capital giant remains optimistic about the cryptocurrency sector for the long term.

Sequoia Capital was hit hard by the collapse of the FTX exchange after pouring $225 million into the now-defunct crypto exchange only to cut the entire investment.

Lin admitted to the VC giant’s failure to uncover the relationship between FTX and Alameda and the alleged fraudulent actions carried out by disgraced founder Sam Bankman-Fried. Although Sequoia owns less than 1% of FTX, Lin noted that the former could have asked for a seat on the board of the latter. However, this proved impossible due to the size of the staking.

Major concession

The dwindling number of venture capital deals prompted Sequoia to cut management fees for its two recently launched crypto and ecosystem funds, Lin said.

The bear market has dramatically suppressed venture capital investments across the board, which has prompted Sequoia Capital’s current push for an unorthodox pricing model for its crypto and ecosystem funds. The venture capital giant communicated new fee changes to investors in December, which now allow limited partners (LPs) who have committed capital to pay management fees based solely on the capital deployed. Such an approach has replaced the traditional capital management model.

[ad_2]