Sequoia Capital apologizes to investors after FTX loss – crypto.news

In the daunting reality of FTX’s turmoil, many companies have suffered financially, with their investments in FTX resulting in zero. Sequoia is among the companies and has lost a significant amount of investment it made in the collapsed company.
What Sequoia will do about the issue
According to a report, citing people familiar with the matter, Sequoia Capital apologized to its limited partners over its investment in collapsed crypto exchange FTX. The Venture Capital firm apologized to its fund investors for the $150 million it lost.
Partners from the firm told fund investors on the call that it would improve its due-diligence process on future investments. Sequoia believed that Sam Bankman-Field’s company misled it based on its recent bankruptcy filing.
The capital firm issued the apology via a conference call with LPs. 
In the wake of FTX’s woes, Sequoia immediately wrote off its entire $150 million investment in FTX, which is one of the largest written by a venture firm in the company. It happened after the crypto exchange struggled to meet a wave of withdrawals.
The conference call also noted a partner saying that the firm would be able to push harder to have even early-stage startups’ financial statements audited by one of the Big Four accounting firms.
Sequoia told its customers in early November that, based on their understanding and evaluation, their investments into FTX were down to $0.
A sigh of hope for investors
To shine some good hope to its clients, Sequoia revealed to its customers that the funds lost through the FTX bankruptcy ($150M) do not disrupt a significant portion of its funds.
The firm noted, ‘Sequoia Capital’s exposure to FTX is limited. We own FTX.com and FTX US in one private fund, Global Growth Fund III. FTX is not a top ten position in the fund, and our $150M cost basis accounts for less than 3% of the fund’s committed capital. The $150M loss is offset by ~$7.5B in realized and unrealized gains in the same fund, so the fund remains in good shape.”
Sequoia said in the letter that they were in the business of taking the risk and that some investments would surprise to the upside while some would surprise to the downside. The Venture Capital firm is yet another big company to be subject to FTX’s downturn.

This article has been originally published at: https://crypto.news/sequoia-capital-apologizes-to-investors-after-ftx-loss/