Sequoia Capital Exec Shines Light On Due Diligence On FTX Investment – Crypto News – Crypto News
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Sequoia Capital Exec Shines Light On Due Diligence On FTX Investment – Crypto News

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According to partner Alfred Lin on Thursday, Sequoia Capital has reduced management fees in its two most recent venture funds as it prepares for a slower investing climate.

Limited partners contributed money to Sequoia’s crypto and ecosystem funds, which were launched early in 2022. Now they are able to pay management fees based on the capital deployed rather than the standard model of capital under management. The changes in fee structure were announced to investors in December.

How much is Sequoia investing?

In addition to a 600 million USD crypto fund to invest in crypto businesses and tokens, the firm unveiled a 950 million USD ecosystem fund. This is to support scouts and funds established by Sequoia alumni. According to Lin, 10% of the crypto fund has already been used.

The world’s largest venture investor made an uncommon concession with this decision after US venture capital agreements decreased by 31% from their peak in 2021. The sharp decline in internet company valuations and the consequences for Sequoia’s portfolio business FTX have put the firm’s long-standing relationships with Limited Partners to the test.

Also read: Tyler Winklevoss Calls SEC Lawsuit Against Politically Motivated Gemini

Did the VC firm follow the due diligence on FTX?

According to reportsthe SEC has inquired about several investors in FTX’s due diligence procedures.

Speaking at the StrictlyVC event on Thursday, Lin said that a thorough investigation and due diligence had been done on FTX, through internal processes that had been started. Lin claimed that they were mistaken in a number of circumstances.

Sequoia Capital reduced its investment in FTX by 150 million USD from its third Global Growth Fund. Also, by 63.5 million USD from its crossover fund, bringing the total amount invested in FTX and FTX US to zero.

The company will still invest in crypto.

“We will invest even during a slower period, but we also won’t stop growing. We are optimistic about the future of cryptocurrency and a number of other industries,” added Lin.

Also read: Court Allows FTX To Sell Japanese, European Subsidiaries

Shourya mainly reports on Cryptocurrency Prices, NFTs and Metaverse. Graduated and post graduated in Journalism, she always wanted to be in business field. Connect with her at [email protected] or tweet at Shourya_Jha7

The content presented may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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