There is a traditional crisis management strategy, in which one says nothing and waits for the outrage to pass. For Sequoia Capital, the strategy worked quite well this week. While the partner Shaun Maguire initially Worn critic On an inflammatory publication on social networks, that initial outrage cooled quickly. Now, some seem to think that Maguire’s challenging position may be strengthening his position. Business Insider Real called it “Good for treatment flow” – Controversion as a competitive advantage.
The calculated oversight of Sequoia entails a real risk, thought. Another provocative position of Maguire that hits the wrong nerve, a change in political winds or the growing consequences could quickly transform its impertillable partner of an asset into a liability that the company can no longer afford to ignore.
A crisis communications professional who has administered reputation disasters for boxes of the main brands tells this editor: “Companies as Sequoia are bulletproof until they are not.”
What happened
The Sequoia synthesism approach was well tested earlier this week when the historical risk firm was found in the eye of a storm about Magire’s comments about the mayor’s candidate in New York City, Zohran Mamdani. Maguire called him a “Islamist” who “comes from a culture that is mostly” on July 4 tweet In X, that has been seen since then more than five million times. More than a thousand signatures have arrived with respect to a request Demanding that Sequoia condemn the comments, investigate Maguir’s behavior and apologize.
There is much talk about why Sequoia has not done this, and many points of sale pointing out that Maguare is not a partner. This status owes in part to its friendship with the co -founder of Stripe Patrick Collison. According to the reports, in an event of Funders Fund in 2015, Maguire-Then, a duration of Collison, defended by the entrepreneur of Founders, with the entrepreneur, completely, an argument with the friendship of Collison de Palmer Luckey Ublol de Anduril, who won Collison’s friendship. The connection was valuable when Maguire joined Google Ventures in 2016; He helped ensure a $ 20 million striped investment that changed his first week. When Maguire left Google Ventures in 2019, Collison personally recommended it to Sequoia members. (Stripe has been in the sequoia portfolio since 2010With the company investing More than $ 500 million about 15 years).
Maguire also directed Sequoia’s investment in Bridge, a Stablecoin platform that Stripe acquired for $ 1.1 billionAnd, according to reports, it is the Sequoia link with Elon Musk, he thought it is barely his only link. The world leader of Musk and Sequoia, Roelof Botha, are native South Africans and are known for more than 25 years, who date back to time together in the then PayPal, where Botha was personally recruited by.
Despite that long relationship, the two have not always seen eyes. Botha was very critical of Musk’s management style when Musk was CEO of the Marrow X.com/paypal company, where Botha was CFO. Bosta Once said The veteran journalist Ebbe Dommisse, “I think he would have killed the company if Elon had remained as CEO for six more months. The mistakes that Elon was making at that time amplified the scope of the business.” But Musk disagreed with almost all that crew at that time, and those tensions have done it a long time ago. Resolved leg.
The biggest point here: when it manages tens of billions of dollars in assets and the reputation of your company is based on the backup winners such as Google, Stripe and Nvidia, it does not easily leave aside a rain manufacturer.
Meanwhile, Maguire’s behavior suggests that he is not going back. After issuing a 30 -minute video Last weekend last, in which he apologized for offending so many, saying that he was making a point about a political ideology and not about a religion, he has doubled with increasingly aggressive positions this week. He said he has “invested modified” his critics “” Command structure “and threatened to” embarrass “anyone who intensify against him. He added that this is” 1% accelerator “and warned people not to” fuck the children of the Internet. “
Silent treatment
Sequoia has a precedent for your focus on this situation. Historically, the firm has given space to its partners to express itself publicly, with figures such as Doug Leone and Michael Moritz (WHO Left the company In 2023) Representation different political perspectives.
But there is a crucial difference between political diversity and incendiary rhetoric and clearly for some, Maguire’s comments extend beyond partisan policy in territory that alienates both political opponents and possible business partners.
It is also worth remembering that even for Sequoia, there is a brilliant line. Michael Goguen, another, previous Rainmaker with the company, was quickly show When Sequoia learned of a demand for sexual abuse filed against him. Situations are not exactly comparable; Goguen’s problems were legal and personal, not ideological. At the same time, Sequoia has shown that he is not willing to surround the wagons at any cost, not if his reputation is at stake.
Presumable, several factors report to the non-thing-noching public relations strategy, including the speed with which people, confronted with a constant gust of news, go from a scandal. The firm is also operating in a different political panorama at this time in the United States along with the victory of Donald Trump and the reversal of the initiatives ofi has been a new tolerance for a controversial speech. What could have been the race-orgen at an earlier time is now more easily worn.
Beyond the changing political winds, the firm is probably banking the fact that, although the founders want partners who fit the traditional and more gentle mold, they want even more successful. Startups that are courted by multiple first -level companies may not like or agree with Maguire, but when Sequoia has been calling with their history and almost bottomless pockets, most founders will welcome the company with open arms.
Of course, there is also the real possibility that Sequoia is working on a contingency plan. (Sequoia declined to comment on Maguire’s publications when Techcrunch arrived earlier this week).
Even so, Sequoia’s silence entails risks. Not all signatories have confirmed Bone, but the petition against Maguire includes some executives and founders of prominent EAAStern who have witnessed the firm, and represent the child or several global talent groups in which future hedges of sequoia. By not addressing the controversy, Sequoia risks Bee seen as tacitly supporting Maguire’s opinions.
In other words, he thought that the world of risk capital has been historically notable to forgive controversial figures With an exceptional treatment flow, the company is playing with its reputation in an increasingly connected global market where regions and entire communities entails real commercial consequences.
If that bet is worth it, it will defend how long the controversy remains, how much business it really costs to Sequoia and if Maguire can resist the impulse to push things beyond the sequoia tolerance threshold. (He said that he does not publish anything that has no bone “Excruitorly thought. “)
History suggests that established financial companies with strong monitoring records tend to survive their scandals, even the serious ones. When Apollo Global Management Leon Black He resigned in 2021 Around his payments of $ 158 million to Jeffrey Epstein, the firm’s shares barely moved and the shareholders seemed large extent. Apollo only continued his aggressive treatment under a new leadership.
Similarly, smaller perkins survived the high profile of Ellen Pao gender discrimination Demand in 2015. But it spent years and essentially a Completely new equipment so that the history firm in history recovers its balance in the hierarchy of Silicon Valley. The lesson here may, although the controversial partners can be supported, the recovery deadlines may vary significantly depending on how companies handle the crisis.
For now, the crisis communications professional, who asked not to be appointed, has some advice for Maguire and, by extension, Sequoia. Regarding the video Maguire published after his initial comments, the expert said: “I thought the apology went to the ambiguities in [Maguire’s] mail. But it is a 30 -minute video that you have to be Reaxly interested in seeing this. “
If there is next time, said the professional, Maguire should “make two videos, one for three minutes” and another longer video, for anyone who wants to keep looking.
Sometimes, the expert added: “Less is more.”
