There is a crisis management strategy with time, where one says nothing and waits for rage to pass. For Sequoia Capital, the strategy worked quite well this week. While partner Shaun Maguire initially outdated criticism Over an inflammatory position of social media, this initial indignation was quickly cooled. Now, some seem to believe that Maguire’s provocative attitude can even enhance its position. Business Insider called it “Good for the flow of agreement“ – Conflict as a competitive advantage.
However, the calculated sequoia bet carries a real risk. Another provocative position from Maguire that strikes the wrong nerve, a shift in political winds or the scalable consequences could quickly convert their unconditional partner from an asset into a responsibility that the business can no longer afford to ignore.
A professional Crisis Communications, who has managed reputation disasters for dozens of big brands, tells the author, “businesses like Sequoia are bulletproof until they are not.”
What happened
The Sequoia hands approach was put on a test earlier this week, when the historic business business was found in the eye of a storm over Maguire’s comments about New York Mayor Zohran Mamdani. Maguire called him “Islamic” which “comes from a culture found for everything” in a July 4th tweet In X that has been over five million times since then. More than a thousand signatures have been spilled about a reference asking Sequoia to condemn the observations, to investigate Maguire’s behavior and apologize.
There has been a lot of talk about why Sequoia hasn’t done so, with many stores noting that Maguire is not just a partner. This situation is partly due to his friendship with his co -founder Stripe Patrick Collison. According to reports, at an event at the Founders Fund 2015, Maguire-then, a businessman who was supported by the founder fund-confirmed Collison during an argument with Palmer Luckey of Anduril for Quantum Computing, gaining Collison’s friendship. The connection proved to be valuable when Maguire joined Google Ventures in 2016. It helped secure an investment of $ 20 million stripe during its first week. When Maguire abandoned Google Ventures in 2019, Collison personally recommended him to Sequoia’s partners. (Since then Stripe is in the Sequoia portfolio 2010with the business investing over $ 500 million over 15 years.)
Maguire also led Sequoia’s investment in Bridge, a Stablecoin platform acquired by Stripe $ 1.1 billionAnd it is alleged to be the Sequoia link to Elon Musk, though it is almost not his only link. The world leader of Musk and Sequoia, Roelof Botha, are both locals South Africans and know each other for more than 25 years, dating back to time together at the then-Nascent Paypal, where Botha was personally hired by Musk.
Despite the long relationship, the two have not always seen an eye in an eye. Botha particularly criticizes Musk’s management style when Musk was chief executive of the merged company x.com/paypal, where Botha was CFO. OTHA Just said Veteran journalist Ebbe Dommisse, “I think he would kill the company if Elon had stayed as CEO for another six months. But Musk contradicts almost the entire crew at that time, and these tensions have long been having was resolved.
The biggest point here: When you manage tens of billions of dollars on assets and your business reputation is based on winners such as Google, Stripe and Nvidia, you do not easily remove a rain.
Meanwhile, Maguire’s behavior indicates that it does not support. After issuing a 30 minutes video On the X last weekend, in which he apologized for the insult of so many – saying he made a point for a political ideology and not a religion – he has doubled with increasingly aggressive positions this week. He claimed to have “reverse” the “structure of administration” of his critics and threatened to “annoy” anyone who escalates against him. He added that he is in “1% throttle” and warned people not to “fuck Wilder of the Internet”.
The silent treatment
Sequoia has a precedent to approach it in this situation. The business has historically given space to its partners to express themselves publicly, with elements such as Dug Leone and Michael Mortz (who abandoned the business in 2023) representing different political perspectives.
But there is a critical difference between political diversity and incendiary rhetoric and clearly in some, Maguire’s comments extend beyond party policy to territory that alienates both political opponents and potential business partners.
It is also worth remembering that even for Sequoia, there is a bright line. Michael Goguen, another, older rainfall with the business, immediately showed the door when Sequoia learned of a sexual abuse of sexual abuse against him. Situations are not exactly comparable. Goguen’s issues were legal and personal, not ideologically. At the same time, Sequoia has shown that it is not willing to rotate the wagons at any cost, not if its reputation is at stake.
Probably, several factors inform the sequoia PR strategy, including how quickly people, who are facing a constant turbulence of news, are moving from a scandal. The business also operates in a different political landscape right now in the US along with Donald Trump’s victory and the return of Dei initiatives has come new tolerance for a controversial speech. What could have ended at a previous time is now outdated.
In addition to the changing political winds, the business is a possible banking for the fact that while the founders want partners that fit the traditional, more polite VC mold, they want the success even more. The newly established companies launched by multiple top -level companies may not like or agree with Maguire, but when Sequoia comes to call with its history and almost unlimited pockets, most founders are going to welcome the business with open arms.
Of course, there is the very real possibility that Sequoia is working on an emergency plan. (Sequoia refused to comment on Maguire’s positions when she arrived at TechCrunch earlier this week.)
Still, Sequoia’s silence carries dangers. Not all signatories have been confirmed, but the reference to Maguire includes the names of some prominent Middle East executives and founders who have believed to sign it and represent the kind of different, global talent group, which depends on the future of the Sequoia. With not dealing with the controversy, the Sequoia dangers are considered to implicitly support Maguire’s views.
In another way, although the world of business capital has historically remarkably forgiven dispute With the excellent flow of the agreement, the business plays with its reputation in an increasingly linked global market, where the compensation of entire areas and communities has real business consequences.
Whether this bet pays will depend on how long the controversy remains, how much business it actually costs sequoia and whether Maguire can resist the desire to push things after Sequoia’s tolerance. (He has said he does not publish anything that was not “studied. “)
The story suggests that established financial companies with powerful historical records tend to overcome their scandals, even seriously. When Apollo Global Management’s Leon Black resigned in 2021 Over $ 158 million to Jeffrey Epstein, the company’s stock as soon as it was moved and the shareholders were largely seamless. Apollo simply continued his offensive negotiation under the new leadership.
Similarly, Kleiner Perkins survived Ellen Pao’s high profile sex discrimination In 2015, but it took years and essentially a whole new team for the historic business business to regain its base in the Silicon Valley hierarchy. The lesson here may be that while the controversial partners can endure, recovery timetables can vary significantly depending on how businesses handle the crisis.
At the moment, professional Crisis Communications, who asked not to be named, has some tips on Maguire and, by extension, sequoia. Concerning the Maguire video published after his initial comments, the expert said: “I thought the apology was addressed to doubts in [Maguire’s] position. But it’s a 30-minute video-you have to be really You are interested in watching this. ”
If there is one next time, the professional said, Maguire should “make two videos – one for three minutes” and another, longer video, for anyone who wants to keep watching.
Sometimes the expert added, “less is more.”
