20VC Exclusive Sequoia's Luciana Lixandru Unveils Sequoia's New 8 Week Accelerator, Arc Biggest Takeaways from Working with Doug Leone and Roelof Botha The Journey From a Small Town In Romania to Partner @ Sequoia

Summary Notes


In this episode of 20 VC, host Harry Stebbings interviews Luciana Alexandru, a partner at Sequoia Capital, about her journey from a small town in Romania to becoming a key player in the venture capital space. Luciana shares insights on her transition into the VC world, the importance of founder-centric investing, and her experience with early-stage companies like Hopin and Deliveroo. She also discusses the challenges of investing across a fragmented European market and the misconception that founders aren't "ready" for Sequoia. Additionally, Luciana introduces Sequoia's new seed catalyst program, Arc, which aims to provide foundational support and networking opportunities for US and European founders. The program will include an eight-week curriculum focusing on company building, an outlier mindset, and leveraging the Sequoia network, with a cohort size of 15 companies to ensure personalized attention.

Summary Notes

Introduction to Luciana Lixandru and Sequoia

  • Luciana Lixandru is a partner at Sequoia, a globally renowned venture firm.
  • Sequoia-backed companies comprise over 20% of Nasdaq's total value.
  • Luciana has led investments in companies like Penny Lane, Central, VEED, and Leggy.
  • Prior to Sequoia, she was a partner at Accel in London.
  • Luciana's journey from a small town in Romania to a leading venture capitalist is celebrated as inspiring.

"I'm thrilled to welcome one of the greatest investors of the last decade, Miro Hopin, Uipath, Deliveroo to name a few, an unparalleled track record, and one of the most authentic and wonderful people as well. And so with that, I'm thrilled to welcome Luciana Lixandru, partner at Sequoia, one of the world's most renowned and successful venture firms, with, check this out, Sequoia backed companies accounting for more than 20% of Nasdaq's total value."

This quote introduces Luciana Lixandru as a prominent investor with a track record of successful investments. It also highlights Sequoia's significant impact on the Nasdaq's value, indicating the firm's influence in the tech industry.

Luciana Lixandru's Background and Journey

  • Born and raised in a small town in Romania, Luciana moved to the US for university.
  • She attended Georgetown University on a full scholarship.
  • Luciana's initial inspiration to move to the US was based on the perception of it as a land of opportunity.
  • She entered investment banking in 2007, joining Morgan Stanley's technology team in London.
  • Luciana transitioned into venture capital in 2011, joining Accel and later moving to Sequoia.

"I was born and raised in a small town in Romania. 100,000 people, I joke. I think it's the 18th largest city in Romania. And when I was 16, I had this idea which at the time seemed crazy. And the idea was that I wanted to go to the US."

Luciana shares her humble beginnings and her ambitious decision to study in the US, which was an unconventional choice at the time in Romania. This decision was pivotal in shaping her future career.

Crucible Moments

  • Luciana identifies key crucible moments that shaped her life and career.
  • Moving to the US for education was a significant turning point.
  • Entering the venture capital industry was another crucial moment.
  • Joining Sequoia and helping the firm expand into Europe was a milestone.

"You know what, sequoia? We talk often about crucible moments, these decisions in a company's life or in a person's life that really change the future."

This quote reflects on the concept of crucible moments, which are transformative decisions or events that have a profound impact on a person's life or a company's trajectory.

Evolution of Investing Style

  • Luciana's investing style evolved from focusing on business models and markets to prioritizing founders.
  • She now enjoys working with founders at the idea stage.
  • Personal experiences, such as meeting the founder of Hopin, influenced her approach.

"Yeah, I think we all evolve and mature. Looking back, I definitely think that I was more of a business model and market investor."

Luciana reflects on how her investment focus has shifted over time, emphasizing the importance of founder-centric investing.

Trusting Convictions and Instincts

  • Success in her career has given Luciana the confidence to trust her instincts.
  • Experience has honed her understanding of preferred spaces and products, allowing her to invest at earlier stages.

"Absolutely. We trust our instinct more and more. The more we see, the more wonderful stories, wonderful founders, wonderful startups that we see, the more we trust our instinct, the more we understand the spaces that we like, the products that we like, and that allows us to go earlier and earlier stage."

This quote encapsulates the growing confidence in her investment decisions based on accumulated experiences and successes.

Intellectual Humility in Investment Decisions

  • Intellectual humility is crucial for investors to correct past mistakes.
  • Past experiences should not cloud judgment for future investments.
  • The ability to reassess opportunities with an open mind is important.

"Intellectual humility is really important in this business. And it's not only about spaces, it's even about businesses."

This quote emphasizes the importance of being open to admitting and learning from past mistakes in investment decisions.

Learning from Missed Opportunities: Deliveroo Case

  • Luciana initially underestimated the market potential of Deliveroo.
  • Intellectual humility allowed her to reassess and invest in Deliveroo later.
  • The early traction, growth, retention, and virality of Deliveroo were key indicators of its success.
  • Market size and potential for global expansion were part of the investment thesis.

"I remember many years ago, I got a call from a friend and he said, hey, my friend Will is moving back to London from business school and he wants to start a company in food delivery... I was so wrong."

Luciana reflects on her initial skepticism about Deliveroo, which she later realized was incorrect, demonstrating the need for mental flexibility.

The Impact of Early Successes on Investment Strategy

  • Early successes in Europe opened Luciana's mind to the potential scale of companies.
  • The job of an investor is humbling due to the inherent risks and failures.
  • Successful investors and companies have experienced both highs and lows.

"I just think it opened my mind a lot."

This quote speaks to how witnessing early successes expanded Luciana's perception of what companies could achieve, influencing her investment approach.

Resilience in the Face of Investment Failures

  • Venture capital involves highs and lows, requiring resilience.
  • Investors need to maintain focus and learn from failures.
  • Founders often demonstrate resilience by overcoming barriers.

"I just think you need resilience, unfortunately."

Luciana advises that resilience is a necessary quality for investors, especially when facing setbacks.

Building Relationships with Founders

  • Luciana aims to maintain a cool head and be supportive as a board member.
  • It's important to push for progress when things are going well and provide support during challenges.
  • Direct communication with empathy is key in board interactions.

"I like to think of myself as someone cool head when things are going well and keeps on pushing when things are going well and is really supportive when things might not go so well."

Luciana describes her balanced approach to board membership, emphasizing the importance of support and constructive feedback.

Asking Tough Questions with Empathy

  • Focus on first-order principles and core questions that matter.
  • Avoid getting lost in negative possibilities and concentrate on a company's key success factors.

"Again, something I learned over the years is to focus on the questions that really matter and really focus on first order principles."

Luciana highlights the importance of concentrating on fundamental issues and asking the right questions with empathy.

Price Sensitivity in Investment Decisions

  • Price dynamics are secondary to company and founder quality in early-stage investments.
  • Growth-stage investments require more price discipline due to limited upside compared to venture investments.
  • The right company selection is crucial regardless of investment stage.

"I would say a lot of learnings, actually, and I would decouple the answer for early stage investing and for growth stage investing."

Luciana differentiates her approach to price sensitivity between early-stage and growth-stage investments, stressing the importance of company selection in early stages.

Reinvestment Decision Making

  • The challenge of deciding whether to reinvest at a higher valuation.
  • Learning from past experiences where additional investment was beneficial.
  • The importance of maintaining confidence in a company's trajectory.

"I have had many of those misses as well... It's human psychology."

Luciana shares her experiences with the difficulty of reinvestment decisions, acknowledging the psychological factors involved.

Signaling in Investment Decisions

  • Sequoia's early investment often serves as a positive signal for companies.
  • Founders have the discretion to bring more investors on board during preemptions.
  • The reputation of the investment firm can influence the market's perception of a company.

"The honest answer is that a lot of our companies get preempted."

Luciana discusses the complexity of signaling in the venture capital market, particularly when companies are preempted by other investors.

Founders' Approach to Raising Money

  • Founders have different approaches when it comes to raising money for their companies.
  • Some prefer to focus on their business and raise funds only when necessary.
  • Others take the opportunity to secure more capital in anticipation of changing market conditions.
  • There is a noticeable trend of companies receiving significant investment.

"Some founders just want to stay heads down and continue working on the business and not focus on raising money until they feel that they need to raise money again. Other founders see it as an opportunity to put more dollars on the balance sheet in case things change."

This quote explains the two different strategies founders may adopt regarding fundraising: concentrating on business development or preemptively securing additional funds for future uncertainties.

Learning from Sequoia's Team

  • Luciana Lixandru shares her learnings from Sequoia's team members: Doug, Alfred, Roloff, and Pat.
  • From Doug, the focus is on addressing first-order issues and understanding people's psyches deeply.
  • Alfred emphasizes the importance of team focus, next-generation talent, recruiting, and mentorship.
  • Roloff is admired for operating at peak performance in every aspect of his job and inspiring others.
  • Pat is recognized for his exceptional storytelling skills.

"With Doug, I have to say two things because it's always two things that come to mind when I think about him. And one is actually what I was talking about before, focusing on first order issues and focusing on the few questions that really matter."

This quote highlights Doug's ability to prioritize critical issues and questions that are key to business success.

"What I'm learning from him every day is he's so focused on the team, he's so focused on the next generations. He's so focused on recruiting, on mentorship."

Luciana Lixandru expresses her daily learning experience from Alfred, which revolves around team building and nurturing future talent.

Training the Next Generation of Partners

  • Venture capital is seen as an apprenticeship business.
  • Luciana Lixandru involves new team members in all aspects of the work, including meetings and board calls, for the first six months.
  • The approach to training is hands-on, with the belief that learning by seeing and doing is most effective.
  • In a remote work environment, including team members is easier, and debriefing after meetings is crucial for long-term growth.

"I try to spend the first six months 100% working with that person and include them in every founder meeting. Include them in every due diligence call, include them in every board meeting."

This quote describes Luciana Lixandru's comprehensive approach to training new partners by fully integrating them into the business processes.

Sequoia's Decision Making and Team Dynamics

  • Sequoia operates as a single team, not distinguishing between Sequoia and Sequoia Europe.
  • The firm focuses on identifying potential category-leading companies globally and supports them fully.
  • Sequoia's team respects and listens to contributions from all members, regardless of seniority.
  • The environment of safety and trust within the team is key to making decisions on outlier investments.

"We just think about it as Sequoia. We changed our name, actually, it's USC. So us, Europe, as one team, one pool of capital, same founders, more and more category leaders are starting."

This quote emphasizes the unified approach of Sequoia's team, working together across geographies under one identity.

Challenges with Sequoia Europe

  • The European startup ecosystem is highly fragmented, with companies emerging from various cities.
  • A misconception exists among founders that they need to be 'ready' for Sequoia, leading them to engage with Sequoia later in the fundraising process.
  • The accelerated pace of fundraising today poses challenges, requiring quicker decision-making and due diligence.

"In Europe, however, it's incredibly fragmented. Companies starting in eastern Europe, Paris, Berlin, Stockholm. It's not one big ecosystem, it's many smaller local ecosystems."

This quote describes the challenge of navigating the diverse and dispersed European startup landscape.

Investing in Founders and Ideas

  • Luciana Lixandru advises investing in world-class founders, even if their initial idea doesn't seem promising.
  • Great founders have the potential to create or expand new categories through their ability to adapt and iterate.
  • The focus should be less on market size and more on the founder's capabilities, especially at the seed stage.

"Invest in great founders. You know why? One of the biggest mistakes I made in my early days was focus too much on market size, let's say."

Luciana Lixandru reflects on her past experience and the lesson learned to prioritize the founder's qualities over the initial market size estimations.

Sequoia's New Project: Ark

  • Ark is mentioned as a new and exciting project within Sequoia.
  • Luciana Lixandru expresses happiness about being a part of Ark, indicating its significance to Sequoia.

"Harry, I am so happy to be a"

Although the statement is incomplete, it suggests Luciana Lixandru's enthusiasm for the new project called Ark within Sequoia.

Introduction to Sequoia's Arc Program

  • Sequoia's mission is to help the daring build legendary companies.
  • Arc is an eight-week seed catalyst program aimed at US and European founders.
  • The program will have separate cohorts for the US and Europe, with Europe launching first.
  • Arc focuses on company building foundations, outlier mindset, and leveraging the Sequoia network.

"Our mission is help the daring build legendary companies. And we always ask ourselves, how can we do things differently? How can we help our founders more? And this is how we came up with the idea for Arc."

This quote emphasizes Sequoia's mission and the inception of the Arc program as a means to further support founders in building successful companies.

Arc Program Structure

  • The program begins with a week together in London and includes other European hubs.
  • Six weeks of remote learning follow, with Zoom sessions, office hours, and community building.
  • There's a visit to a "legendary" company for practical insights.
  • The program concludes with another week in-person at Sequoia's California office.

"We start with a week together. The first cohort will be in London. We're going to rotate and go to other European hubs as well."

This quote describes the kickoff of the Arc program, which begins with an in-person week in London and plans to include other European locations.

Core Components of the Arc Program

  • Company Building Foundations: Long-term company building with a focus on various aspects such as product, go-to-market strategies, tech recruiting, and culture.
  • Outlier Mindset: Encouraging ambition, grit, resilience, and support networks.
  • Sequoia Network: Providing access to Sequoia's network for recruiting and customer introductions, and fostering a sense of community among cohort members.

"There's three core parts. There is the foundations part around company building, a second part around outlier mindset... And the third one is the Sequoia network."

Luciana Lixandru explains the three fundamental components of the Arc program, which are designed to provide a comprehensive support system for founders.

Cohort Size and Individual Attention

  • The European cohort will consist of 15 companies to ensure personalized attention.
  • It is an open application program, the first of its kind for Sequoia.
  • Founders from Europe can apply, and the program includes a $1 million investment in the form of equity.

"We are going to have 15 companies in our European cohort... It's open application. It's the first time Sequoia does something like this."

The quote highlights the exclusivity and the novel approach of the Arc program, with a limited cohort size to ensure quality engagement.

Local and Global Company Building Strategies

  • The program addresses commonalities and differences in company building in the US and Europe.
  • Specific strategies for Europe include thinking internationally from day one and understanding the nuances of technology recruiting across European hubs.

"There are some things that are in common to the US and Europe... But there are also things that are unique."

Luciana Lixandru discusses the tailored approach of the Arc program to cater to both global and local challenges faced by founders.

Future Vision and Success Metrics for Arc

  • Success for Arc is defined by giving founders a strong early foundation.
  • The hope is that many successful companies in five years will have started with support from Arc.
  • The program aims to reduce the loneliness founders often feel by creating a supportive community.

"As I think about all the wonderful companies that will be around in five years from now, I really hope that the vast majority of those founders will have gotten that jump start from Arc in the early days."

The quote reflects Luciana Lixandru's vision for the long-term impact of the Arc program on future successful companies and their founders.

Personal Preferences and Changes in Perspective

  • Luciana Lixandru finds it difficult to choose favorites but recommends "The Spy and the Trader" for its gripping narrative.
  • She changed her mind about watching "Squid Games" after initially resisting due to its violent concept.

"I have a really hard time picking favorites with anything... It's called the spy and the Trader, and it's a real espionage story from the cold war days."

Luciana Lixandru shares a personal book recommendation, highlighting her interest in storytelling and history.

Reflections on Career and Investment

  • Luciana Lixandru reflects on the scale and impact of companies she has worked with.
  • Her biggest strength is her drive and perfectionism, while her biggest weakness is a lack of a technical background.
  • Her insecurity revolves around the ability to replicate past successes with new companies.

"Just the scale and the impact that many of these companies can reach, that was really eye opening for me."

This quote reveals Luciana Lixandru's realization of the potential scale and impact of startups, which has been a significant insight in her career.

VEED Investment and Video as a Platform

  • Sequoia's recent investment in VEED aligns with their thesis that video is an exponentially growing platform.
  • VEED's appeal includes its status as the best online video editor and the founders' story of grit and bootstrap success.

"It's called VEED... And VEED is the best online video editor out there."

Luciana Lixandru expresses her enthusiasm for VEED, a recent investment that underscores Sequoia's belief in the future of video as a platform.

Conclusion and Acknowledgements

  • Harry Stebings expresses excitement for the Arc program and its potential impact on founders.
  • Luciana Lixandru thanks Harry for the opportunity to discuss the program and its details.

"Thank you so much. I was so happy to do this with you. Thank you, Harry."

The quote captures Luciana Lixandru's gratitude for the chance to share insights about the Arc program on the podcast.

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