Sequoia Capital

Sequoia raises venture funds at roughly one to two billion sizes. Limited partners—pensions, endowments, family offices—commit capital. Sequoia charges two percent annual management fee. On a one billion fund, that equals twenty million per year. Two hundred million across ten years. Management fees cover overhead. Profits come from carried interest. The model required hitting extraordinary exits. Carried interest was the share of gains. Sequoia takes twenty to thirty percent of profits above eight percent. On a one billion fund returning five billion, carry reached eight hundred million to one point two billion. If the fund earned nothing, Sequoia earned nothing from carry. Partners made fortunes from investments, not fees. The model aligned incentives: Sequoia won when investors succeeded. A typical investment: five million dollars for twenty-five percent of a company valued at twenty million. If the company reached ten billion, Sequoia's stake was worth two point five billion.