Sequoia branches too far

October 23, 2009: 7:00 AM ET

A storied financier of startups expands -- but its new businesses have yet to take root.

A year ago, when venture capital firm Sequoia Capital ordered its portfolio companies to slash costs in the face of a sick economy, even healthy businesses, such as LinkedIn and, complied.

As word of the edict spread, many non-Sequoia startups also trimmed their budgets -- a testament to the venture firm's influence in Silicon Valley and beyond. In its 35 years in business Sequoia had nurtured the likes of Atari, Apple (AAPL), Cisco (CSCO), Yahoo (YHOO), and Google (GOOG). If it was bracing for the worst, the situation must be serious.

But just as Sequoia was commanding its upstarts to contract, the firm was plotting an ambitious expansion of its own. Throughout 2008 and into this year Sequoia tried entering entirely new businesses, hiring professional investors to build a hedge fund, as well as an asset-management group that would mimic the wealth-preservation approach popularized by major university endowments. More

  • Online video sites fizzle

    Startups Joost and Veoh try to retool while network-backed Hulu cruises.

    The Web video shakeout has begun. Hulu, a venture of NBC, ABC, and Fox, is growing nicely, aided in part by a slick marketing campaign using, of all things, television ads starring Alec Baldwin. But a slew of smaller sites are starting to reformulate their strategies in the hope of surviving.

    Joost, which was started by the founders of Skype Technologies, MORE

    - Jul 30, 2009 12:18 PM ET
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