Why Sequoia Is Blowing Up a 50-Year-Old Financing Model

Date: October 27, 2021

Publication: PitchBook Data

Thompson Hine partner Lindsay Karas Stencel was recently quoted in PitchBook Data article, “Why Sequoia is blowing up a 50-year-old financing model.”

"[Potential tax increases likely have] a role here, but I don't think it is a fundamental one," said Lindsay Karas Stencel, a fund-formation lawyer with Thompson Hine LLP. "I think this has mainly to do with antiquated ways of doing venture and that 10-year fund periods no longer match how long it takes to effectively and properly grow a business and maximize returns."

"I think the timeframes that were put on venture funds prior to this shift by Sequoia caused some undue stress and pressure on entrepreneurs," Karas Stencel said. Additionally, the firm missed out on strong returns when it had to sell positions in still quickly growing companies.

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