In a conference call with its investors, Sequoia Capital partners apologized for their decision to invest in FTX.com and FTX US, Bloomberg reported, citing people with knowledge of the call.
Sequoia has funneled US$214 million into the two projects, across two funds, according to the report.
Alfred Lin, who spearheaded the FTX deal, crypto-focused partner Shaun Maguire, and global head Roelof Botha were the foremost speakers at the virtual meeting, the sources said.
Sequoia clarified that it had reviewed FTX’s unaudited statements before investing. In response, one partner suggested that moving forward, Sequoia should push for startups to consult Big Four accounting firms: Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG).
Sequoia also doubled down on earlier statements that it had conducted rigorous due diligence – even repeatedly reviewing financial statements to explore the connection between Alameda Research and FTX, both founded by Sam Bankman-Fried.
Reports have pointed to Alameda using customer funds from FTX. In May this year – months before the meltdown – Sequoia was told that this was not the case. The partners at the VC firm said they were misled.
The news comes after Sequoia marked their FTX investment at US$0 earlier this month.
See also: Singaporeans feel ‘betrayed’ by Temasek-backed FTX
Editing by Miguel Cordon and Arpit Nayak
(And yes, we’re serious about ethics and transparency. More information here.)
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