Morning Coffee: The world's top VC tells Goldman Sachs about excruciating interviews, feeling rich. Steve Cohen's dietary preferences

If you're a senior banker at Goldman Sachs and you want to ingratiate yourself with your client who is the head of venture capital (VC) firm Sequoia Capital, then it helps to give them an opportunity to demonstrate that they're a good human being.

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This is what Ken Hirsch, head of Goldman Sachs' global VC coverage group, has done in his recent interview with Roelof Botha, the managing partner at Sequoia. In a wide-ranging interview, there's no mention of Sequoia's failed $225m investment in FTX or of Sequoia's controversial $800m investment in Elon Musk's X, but there's plenty of chat about what it's like to work there and Botha's imposter syndrome. 

If you aspire to work for Sequoia, which also counts successful investments in Nvidia, YouTube and Stripe among its endeavours, you'll need to be good. It only employs 200 people globally, of whom only 25 are in the investment team. To get the job, Botha - who was previously the CFO of PayPal, says he had to go through some "excruciating" interviews. "One on one interviews. Second interviews with the same partners. Two on one interviews." He thought he'd failed. 

Succeeding in the excruciating interviews requires an evangelical zeal for VC investing. VC is a profession that involves finding "unusual people" and "dreaming with them to build a beautiful business," declares Botha. Sequoia is a place that values intellectual honesty and kindness. If you want to understand the ethos, you should probably read 'Viktor Frankl's Man's Search for Meaning,' which is in the Sequoia library. Meaning at Sequoia is about "helping founders realize their ambitions", reveals Botha. "The companies we've backed directly have created over a million jobs in America," he observes. 

This doesn't mean that working for Sequoia is gentle and easy. His 25 investment professionals are held to high standards. "Every single 25 member of the team needs to show up every single day and prove their worth to be part of the team today," says Botha. "And at some point, it may be that you need to make space for somebody else for the sake of the team." 

Botha says Sequoia's investment process involves an interesting "pre-mortem" approach in which the team questions whether, if everything goes right, a company will really matter in the future and go on to be, "one of the 500 most valuable technology companies in the world" or will dwindle into mediocrity. FTX evidently passed all these tests in 2021.

Botha now lives in a large house in Los Altos California and has a net worth rumoured to be in the hundreds of millions. However, he wasn't always as well-endowed. When he was 28, Botha says PayPal did a "small liquidity event" which meant that he went from being in student debt to having $30,000 to $40,000. " I felt rich. And it was fantastic. And I could go on vacation. And move into a better apartment," he says. Presumably he now feels even better.

Even now, though, Botha says he has imposter syndrome. Imposter syndrome haunts you, he says. In VC, you're only as good as your last investment. When he first lost $10m on an investment, Botha says he cried in a partner meeting. The interviews are excruciating, but the job isn't easy either. 

Separately, Steve Cohen, the co-CIO of hedge fund Point72 has lost dramatic amounts of weight in recent years, but still has some curious dietary foibles. The Financial Times reports that when Cohen visits the UK office, his arrival is pre-empted by the addition of Skittles and Dr. Pepper to the company fridge. No one else is allowed to consume them: they're flagged by Post-it notes saying, "Do not touch."

Meanwhile...

Commerzbank's labour unions think that the merger with Uncredit could lead to two thirds of jobs being cut. (Bloomberg) 

Private equity firms probably shouldn't be doing dividend recaps. A study shows they increase the chance of bankruptcy by 31pp in the next six years relative to a mean of 1.3%. (Financial Times) 

Man Group has introduced pass through costs for its Man Strategies 1783 fund. However, they will only apply to compensation. (Bloomberg) 

Jamie Dimon on senior bankers and junior banker working hours: "A lot of investment bankers, they've been traveling all week, they come home and they give you four assignments, and you've got to work all weekend. It's just not right....You've got to stop, and it will be in your bonus, so that people know we actually mean it." (MSN) 

Jamie Dimon doesn't like the fact that government employees work from home. “By the way, I’d also make Washington, DC, go back to work. I can’t believe, when I come down here, the empty buildings. The people who work for you not going to the office...That bothers me." (Yahoo) 

Partner Pay at EY is falling again. However, staff in the financial services division, which advises on corporate deals, said their pay had increased by 5 per cent. (The Times)  However, staff in the financial services division, which advises on corporate deals, said their pay had increased by 5 per cent. Auditors, historically lambasted for being in the low-margin part of the business, were given a specific award because of how well the business was performing. EY would not give details of

Ex-Morgan Stanley CEO is selling his Oil Nut Bay Beach House for $29m. After spending a few weeks there, his wife decided she had to gut it. “It wasn’t to my taste, and it wasn’t practical. It wasn’t user friendly, there was wasted space, and I like a homier feel," she says. “Everything is custom. All the furniture, all the lighting, everything.” (With the exception of a few items, all of the furniture and decoration is included in the purchase price.) (Bloomberg) 

Inside the Delta One lounge at Terminal 4 at JFK International Airport. "I signed up for a 15-minute session in one of five massage chairs, a session in the relaxation pod with Hyperice compression boots, and a head and neck massage. The head and neck massage was nothing special, but I could have spent all day in the massage chair. The attendant told me one traveler booked six sessions on a day that wasn’t too busy. All are complimentary." (WSJ) 

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