Michael Moritz leaves Sequoia Capital after almost 40 years

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Michael Moritz is leaving Sequoia Capital after almost 40 years leading the Silicon Valley firm’s investments in companies including Google, Yahoo, YouTube and PayPal.

The departure of one of the tech industry’s best-known investors from start-up dealmaking represents another major shake-up for the US venture capital group following last month’s decision to split off its China and India units.

Moritz will from Wednesday focus on Sequoia Heritage, a $15bn wealth-management fund that he helped launch in 2010, according to a letter from Roelof Botha, Sequoia Capital’s managing partner, to its investors.

“We are immensely grateful for all of Michael’s contributions. He helped establish Sequoia as one of the leading technology investment groups in the world,” Botha wrote in a letter to the firm’s limited partners. Moritz planned to “smoothly transition” from board seats at the firm’s investments “over time”, he added.

One venture capitalist who has invested alongside Moritz and Sequoia said the departure risked leaving a “leadership gap” at a critical time. “It’s been a long time coming, but it comes at a bad time,” the person said. “The firm is going through a lot of change: the split with China, losing [head of Sequoia China] Neil Shen.”

“Mike is very wise, it would have been good to have him stay for a couple of years while they manage the transition,” the person added.

The Welsh-born former journalist, who was knighted in the UK in 2013, has been synonymous with the fund’s runaway success, securing lucrative early stakes in some of Silicon Valley’s biggest and fastest-growing companies after joining Sequoia in the mid-1980s. He led the firm from the mid-1990s until 2012, when he stepped down citing an undisclosed illness.

Moritz’s recent investments include in fintechs Stripe and Klarna, as well as ecommerce groups Instacart and Getir. In 2019, he stepped in to secure the future of the Booker Prize, sponsoring it for five years through Crankstart, the charitable foundation that he runs alongside his wife Harriet Heyman.

Botha’s letter to the firm’s limited partners noted that Moritz “relinquished day-to-day management of Sequoia more than a decade ago, but, since then, has provided support and counsel to the Partnership”.

Moritz’s new duties will be a change of pace from the world of Silicon Valley start-ups such as Nvidia and WhatsApp that Sequoia has previously backed.

Sequoia Heritage operates as a separate legal entity to Sequoia Capital although Botha described it as managing investments from “many members of the greater Sequoia community”.

The fund was founded in 2010 to help the venture capital firm’s partners and the start-up founders it backed to manage their wealth. It invests both in funds and directly in individual companies, making independent investment decisions to Sequoia Capital.

At its creation, Moritz and Doug Leone, another long-serving Sequoia partner, each invested $150mn, alongside $250mn from outside investors. Subsequent investors have included Stripe’s co-founder John Collison and former Google chief executive Eric Schmidt’s family foundation, regulatory filings have shown.

Mike Vernal, a Sequoia partner focused on early-stage companies, has also stepped back from investing until at least the end of the year, while another partner, Daniel Chen, has departed in recent months according to a person with direct knowledge of the situation.

Vernal and Chen’s moves were first reported by The Information. The New York Times first reported Moritz’s move.