{"id":39869,"date":"2022-11-10T02:17:23","date_gmt":"2022-11-10T06:17:23","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=39869"},"modified":"2022-11-10T02:17:24","modified_gmt":"2022-11-10T06:17:24","slug":"sequoia-capital-reduces-its-214-million-stake-in-ftx-to-zero","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/sequoia-capital-reduces-its-214-million-stake-in-ftx-to-zero\/","title":{"rendered":"Sequoia Capital reduces its $214 million stake in FTX to zero"},"content":{"rendered":"\n
Sequoia Capital, a venture capital firm<\/a>, gave partners the assurance that it had conducted a thorough investigation before investing in FTX and had discovered that the exchange generated $1 billion in revenue and $250 million in operational income.<\/h5>\n\n\n\n
\"Sequoia
Sequoia Capital reduces its $214 million stake in FTX to zero<\/figcaption><\/figure>\n\n\n\n

Sequoia Capital, a venture capital firm, said in a letter to its partners on November 10 that it had written down to $0 and declared a full loss on its $213.5 million investments in FTX and FTX US.<\/p>\n\n\n\n

The letter argued that FTX's exposure to the exchange is “limited” in its Global Growth Fund III\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>, where the cost basis for the FTX share of the fund was $150 million, despite the fact that the crisis affecting the company has “generated a solvency risk.”<\/p>\n\n\n\n

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Here is the note we sent to our LPs in GGFIII regarding FTX. pic.twitter.com\/Cgp1Yxk1pz<\/use><\/svg><\/span><\/a><\/p>— Sequoia Capital (@sequoia) November 10, 2022<\/use><\/svg><\/span><\/a><\/blockquote>

Sequoia told its investors that the fund<\/a> wouldn't suffer from the writing down of FTX, noting that it represented less than 3% of the capital committed to it, and adding:<\/p>\n\n\n\n

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\u201cThe $150M loss is offset by ~$7.5B in realized and unrealized gains in the same fund, so the fund remains in good shape.\u201d<\/p>\n<\/blockquote>\n\n\n\n

As part of FTX's $900 million Series B investment round in July 2021, Sequoia made investments in the now-cash-strapped cryptocurrency exchange. At the time, this was the largest crypto investment ever documented.<\/p>\n\n\n\n

Sequoia told its partners that it thoroughly investigates each and every investment with due diligence, and FTX <\/a>was no exception.<\/p>\n\n\n\n

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\u201cAt the time of our investment in FTX, we ran a rigorous due diligence process. In 2021, the year of our investment, FTX generated approximately $1B in revenue and more than $250M in operating income.\u201d<\/p>\n<\/blockquote>\n\n\n\n

\u201cWe are in the business of taking risk. Some investments will surprise to the upside, and some will surprise to the downside,\u201d the letter explained.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sequoia Capital, a venture capital firm, gave partners the assurance that it had conducted a thorough investigation before investing in FTX and had discovered that the exchange generated $1 billion in revenue and $250 million in operational income. Sequoia Capital, a venture capital firm, said in a letter to its partners on November 10 that […]<\/p>\n","protected":false},"author":38,"featured_media":39873,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[778,8563],"class_list":["post-39869","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ftx","tag-sequoia-capital"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2022\/11\/Sequoia_1576515165110_1616664906058.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/39869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=39869"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/39869\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/39873"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=39869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=39869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=39869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}