VC Firm Sequoia Capital Reportedly Apologizes for Investing in FTX

It seems that on Tuesday (22 November 2022) Silicon Valley venture capital firm Sequoia Capital had a conference call with investors in its fund(s) that had exposure to and FTX US.
On 8 November 2022, Samuel Bankman-Fried (aka “SBF”), Co-Founder and (now) former CEO of crypto exchange, and CZ, Co-Founder and CEO of, announced that FTX and Binance had come to a provisional agreement:

This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022

On 9 November 2022, Binance announced why it was not able to go ahead with the plan to fully acquire, pointing out that although it was hoping to “support FTX’s customers to provide liquidity”, the issues it discovered — as part of its due diligence process and via the various news reports about FTX — were “beyond” its “control or ability to help”:

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of
— Binance (@binance) November 9, 2022

On 10 November 2022, Sequoia sent the following note to the LPs in its Global Growth Fund III (GGFIII), in wihich it said that it said it was marketing its investment in FTX down to $0. Two of Sequoia’s funds had exposure to FTX: private fund Global Growth Fund III had invested $150 million in and FTX US; and public/private crossover fund Sequoia Capital Global Equities (SCGE) had invested $63.5 million in and FTX US.

On 11 November 2022, issued the following press release:

And here is how — on the same day — SBF announced the collapse of the FTX empire:

2) I’m really sorry, again, that we ended up here.Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.Ultimately hopefully it can be better for customers.
— SBF (@SBF_FTX) November 11, 2022

The following video from Wall Street Journal nicely summarizes how FTX went bankrupt:

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Well, on Tuesday (22 November 2022), Wall Street Journal (WSJ) reported that — according to people familiar with the matter — “Sequoia Capital apologized to its fund investors for the $150 million it lost on crypto exchange FTX.”
Image Credit
Featured Image via Pixabay

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