Sequoia Capital, the Silicon Valley venture capital firm and one of the largest backers of fintechs such as Stripe, Klarna, and Block, has found itself in the hot seat after one of their partners, Shaun Maguire, said that New York mayoral candidate Zohran Mamdani, “comes from a culture that lies about everything. It’s literally a virtue to lie if it advances his Islamist agenda. The West will learn this lesson the hard way”.
Instead of distancing themselves from the comment, Sequoia’s senior partners declined to take action against Maguire, arguing he was simply exercising his right to free speech. This stance sparked more anger, over 1,000 founders and tech employees signed an open letter calling for Maguire to be disciplined. The comments are also likely to have angered some of Sequoia’s largest investors, the sovereign wealth funds from majority-Muslim countries in the Middle East.
Adding to the controversy, the Financial Times confirmed yesterday that Sequoia’s COO, Sumaiya Balbale, a practicing Muslim who was well-regarded internally and by the start-ups she worked with, resigned after five years at the company. Her decision to leave was precipitated by Maguire’s comment, which she regarded as Islamophobic.
More from Forbes, What A Zohran Mamdani Win Will Mean For Wall Street.
Internal Friction and the Role of an Outspoken Partner
Maguire later attempted to mitigate the backlash by distinguishing his criticism of Islamism (a political ideology) from Muslims generally. Maguire’s social media posts drew criticism from many colleagues. Though senior figures supported his right to freedom of speech, they urged him to consider the potential damage to the firm’s standing.
The entire situation became a challenge for Managing Partner Roelof Botha. Botha tried to contain the situation by holding an all-hands meeting on the issue while avoiding public statements. Botha has described Sequoia’s position as one of “institutional neutrality,” which allows employees to hold their own personal political views.
Maguire’s controversial behavior is partially tolerated because he has been a successful investor. As a physicist with a PhD in quantum gravity, he has cultivated strong ties with Elon Musk. His successful investments in Musk’s companies, including xAI, SpaceX, Neuralink, and Boring Company, have been very profitable for Sequoia. The success of SpaceX alone, which was recently valued at $400 billion in an employee share sale, generated an on-paper gain of about $4 billion for Sequoia.
For more on Forbes, How Wall Street’s $9 Billion Revenue Boom Can Fund U.S. Industrial Strategy.