Sequoia Capital Hires Yahoo’s Jess Lee as First Woman U.S. Investing Partner
For the first time in its 44-year history, Sequoia Capital, one of the most vaunted venture capital firms in Silicon Valley, has hired a female investing partner for its U.S. operations.
Sequoia had been wooing Jess Lee since 2012 . She's the co-founder and chief executive officer of Polyvore, a shopping site for fashion and home decor. Yahoo! Inc. acquired it last year for $230 million, and as Yahoo is now being bought by Verizon Communications Inc., Lee agreed to join Sequoia. When she starts on Nov. 7, Lee, 33, will become the 11th partner and one of the youngest investing partners at the firm. In an e-mail to Bloomberg, she wrote she was "excited to join Sequoia to help the next generation of founders."
Sequoia is among the world's most respected firms because of its early bets on companies including Apple and Google. The firm has several female investors overseeing its global funds, but like many venture firms, its Silicon Valley headquarters is run by a group of older men. Women make up just 6 percent of the senior investment teams at top venture firms in 2016, according to researcher PitchBook Data, up slightly from 5 percent in 2010.
"Getting the first female venture capitalist into a top-tier partnership is a big deal," said Kate Mitchell, the co-founder and partner of Scale Venture Partners and the chairwoman of the National Venture Capital Association’s task force on diversity. "Whether that translates into a long-term commitment to better inclusion, only time will tell."
As standard bearers in the industry, Sequoia and Kleiner Perkins Caufield & Byers have been lightning rods in the diversity debate. Kleiner Perkins, which was unsuccessfully sued by Ellen Pao for sexual discrimination, has added several female investing partners over the last decade or so. In India and China, Sequoia has a total of five female investing partners. In the U.S., Sequoia was slower.
Sequoia Chair Mike Moritz told Bloomberg TV last year he was working to find a female partner but that it was difficult and the firm wasn't prepared to "lower standards." The statement sparked outrage. (He later clarified his remarks in an e-mail to Bloomberg, saying, “I know there are many remarkable women who would flourish in the venture business. We’re working hard to find them.")
Other VC firms, including Accel Partners, Bessemer Venture Partners, General Catalyst, IVP, Mayfield Fund and Redpoint Ventures, still list only men among their U.S. partners, according to their web sites. Some investors in venture funds have said they apply pressure on firms to become more diverse at the partner level, but calling for change requires extreme diplomacy.
“We always ask about the team, plans to add women and try, where appropriate, to introduce managers to women candidates,” said Joelle Kayden, founder of Accolade Partners, which invests in venture firms including Andreessen Horowitz and Accel. She noted that in the past few years, more women have founded their own VC firms: Aileen Lee started Cowboy Ventures, and Theresia Gouw and Jennifer Fonstad opened Aspect Ventures.
VCs and entrepreneurs say that more female investing partners has a trickle-down effect: Women venture capitalists are more likely to serve as role models to female entrepreneurs and identify potential in businesses that target women. Currently, the percentage of female entrepreneurs hovers around 30 percent, said Ross Levine, a professor at the Haas School of Business at the University of California, Berkeley.
Becoming a venture investor marks a turning point for Lee, a computer science graduate of Stanford University. Her first job after school was as a product manager developing features for Google Maps. Lee left Google to join fashion shopping and styling startup Polyvore as its first outside employee in 2008. She did everything from writing code to selling ads and finding office space, and in 2010, Polyvore's three founders made her an honorary co-founder. In 2012, they asked her to become CEO.
Lee fits a rare profile: an entrepreneur with a lot of success, yet young enough to have a long career ahead of her. Sequoia could potentially groom her for a leadership role. "Her rare blend of product and design sensibility, leadership and grit will make her a tremendous asset to Sequoia founders and our team,” Sequoia partner Roelof Botha wrote in an e-mail.
Botha said he and partner Alfred Lin heard Lee speak at a tech conference in 2012, were immediately impressed and began getting to know her. Botha invited her to join Sequoia when Yahoo acquired Polyvore last year; she wasn't interested. She said she felt loyal to her coworkers at Polyvore and Yahoo CEO Marissa Mayer, whom she had known since her days at Google. This spring, conversations heated up again, and Lee accepted.
Sequoia added Mike Vernal as a partner in May, the first addition since the departure of Michael Goguen, a longtime partner who left this year after he was sued for alleged sexual abuse. (Sequoia quickly severed all ties with him, and Goguen countersued for extortion.) Botha said Sequoia may add one more partner; he was vague on timing and other details. "If we have a more diverse group, we will make better decisions," he said.
—With Olivia Zaleski