PortalsOS

Private equity is becoming increasingly large, but there are concerns about its impact on society if great companies remain private and inaccessible to public investors.

In 2022, we launched the Sequoia Capital Fund to keep shares of companies that have the ability to compound longer term. This decision led to $6.7 billion in gains that our LPs would not have seen otherwise.

The key to successful private equity is partnering with existing teams. When we acquired Grindr, we brought in experts like Sam Yagan, who had extensive experience in the dating industry, to strengthen our team.

Finding the right private equity deals involves leveraging networks to identify profitable businesses where founders might want to retire or cash out. These are often successful but not suitable for public offerings.

Private equity requires a focus on risk reduction. Unlike venture investing, where you bet on a few big successes, private equity demands a close examination of potential downsides to ensure deals pay off.

Switching from venture-backed startups to private equity felt like moving from catching lightning in a bottle to a more stable and rewarding game, focusing on growing already successful businesses.

SPAC 2.0 aims to provide a competitive vehicle for taking companies public with lower costs, focusing on robust companies with predictable revenue.

Being an entrepreneur is challenging due to the lack of control over time. You might work 100 hours a week, but the uncertainty of how long it will take to succeed is daunting. Private equity offers shorter timeframes, avoiding decade-long commitments.

Rick Marini shares a strategic insight on private equity: 'If you can add debt to a business, get in at a reasonable entry multiple, and have a solid thesis to double revenue in the next three to five years, you can achieve a 5 to 10x return.'