Sequoia’s investment partners regularly gather for rigorous decision-making sessions where they evaluate whether emerging startups possess the potential to join the firm’s prestigious portfolio. These meetings are not casual discussions but highly structured deliberations aimed at discerning which ventures truly have the qualities to ‘make the cut.’ According to two of Sequoia’s senior partners, Alfred Lin and Pat Grady, the firm has refined a repeatable method that helps them identify those rare, high-impact opportunities — their metaphorical formula for “striking gold.”
During a recent episode of the *Jack Altman* podcast, released on a Tuesday, Lin and Grady elaborated in depth on how Sequoia determines which startups ultimately receive a funding cheque. They explained that the process is grounded in years of accumulated practice and supported by detailed internal data. Grady revealed that for over a decade, the firm has recorded quantitative votes from each partner on every investment decision. This consistent tracking enables Sequoia to analyze patterns in its choices and outcomes. Intriguingly, Grady pointed out that their findings demonstrate a surprising conclusion: whether the team reaches broad consensus or remains divided has no statistical correlation with investment success. What truly makes a difference, he emphasized, is something entirely different — the unmistakable “presence of conviction.” In essence, strong belief and passionate advocacy carry far more weight than comfortable agreement.
As one of Silicon Valley’s most storied venture capital institutions, headquartered in Menlo Park, Sequoia has a legendary track record of backing companies that have defined modern technology. Its portfolio includes industry-defining names such as Apple, Nvidia, Reddit, and SpaceX — each an emblem of transformative innovation. More recently, the firm has extended its reach into cutting-edge fields by funding ventures like Kalshi, a company specializing in prediction markets, and Harvey, an emerging player in the field of legal technology.
Grady, who has dedicated nearly nineteen years to the firm, outlined how every potential investment undergoes a systematic voting process. Before any startup receives a definitive ‘yes’ or ‘no,’ each member of the investment team assigns a score on a numerical scale from one to ten. Scores above six indicate a generally positive outlook, while those rated four or below signal a negative impression. Yet, the results are not interpreted in purely statistical fashion. Grady explained that a scenario where every partner assigns a safe middle-ground score, such as all sixes, often implies a lack of genuine enthusiasm. Although such outcomes reflect consensus, they reveal the absence of conviction — a condition that, in Sequoia’s view, undermines the likelihood of discovering exceptional opportunities. Conversely, when voting produces intense polarization — for example, three partners rating a proposal at nine and another three rating it at one — the presence of strong conviction among even a few members is deemed a far more compelling indicator. To Sequoia, the passionate endorsement of a minority suggests the existence of a unique insight others may not yet recognize.
Alfred Lin, who joined Sequoia in 2010, echoed this philosophy by emphasizing that venture capital inherently revolves around embracing uncertainty and calculated risk-taking. The firm, he explained, depends on volatility because the most transformative truths almost never reside in the safe middle ground where everyone comfortably agrees. Innovation flourishes where ideas challenge convention and where investors are unafraid to support unconventional founders and unproven concepts.
Both partners also discussed how this mindset is deliberately cultivated throughout Sequoia’s culture, especially among its junior investors. Many of these new team members arrive with near-perfect academic records — ‘A+’ students accustomed to success and precision — yet relatively little experience with failure. According to Grady, part of their professional development involves learning to become comfortable with risk and resilient in the face of uncertainty. He emphasized that failure, rather than being a sign of weakness, is an inevitable and instructive component of achieving “outlier” successes — those rare, industry-defining wins that come to define entire generations of startups. By training emerging investors to embrace boldness over caution, Sequoia ensures that its culture continues to reward conviction, curiosity, and courage — the very characteristics that have kept it at the forefront of venture capital for decades.
Sourse: https://www.businessinsider.com/sequoia-partners-startup-decison-making-vote-process-venture-capital-2025-12
