Michelle Bailhe: Sequoia Capital’s Investment Process

In FTX Podcast #89, Tristan speaks with special guest Michelle Bailhe. Michelle is a partner at Sequoia Capital helping founders grow.

*Compared to major competitors. Terms and conditions apply. This is not investment advice or an investment recommendation. NFTs are shown for illustrative purposes and the types of NFTs available may vary. Cryptocurrencies, including NFTs are highly volatile, subject to significant price risk, and may not be suitable for you.


What makes crypto projects possible? They require a lot of brilliance and problem solving behind the scenes, but they also require something more practical – financial resources. That’s where Venture Capital firms like Sequoia Capital come in.  

But Sequoia does things differently by providing more than just capital to its founders. Their hard work toward building long-term relationships rooted in helping founders succeed is what’s made them the premier VC firm for decades on the Silicon Valley scene.  

Today, we sit down with Michelle Bailhe, one of Sequoia Capital’s savvy investment partners. We’ll discuss why Sequoia is so bullish on crypto, the future of women in crypto, and much more. Stick around! It’s going to be a fun one.  

Michelle Bailhe Interview

Tristan Yver:  

Hello, everyone. Welcome to FTX podcast. I'm your host, Tristan Yver. And today, I have the pleasure of having with me Michelle Bailhe, a partner at Sequoia. Welcome.  

Michelle Bailhe:  

Hello, thanks for having me.  

Tristan Yver:  

Yeah, absolutely. My pleasure. I mean, I imagine all the listeners know what Sequoia is, but perhaps not so much what they do. So, I would love perhaps some background from yourself and Sequoia if that's cool.  

Michelle Bailhe:  

Yeah. I'll start with Sequoia first because that's a lot more interesting than me. Sequoia's a nearly 50-year-old venture capital firm investing since the early days of Silicon Valley into Silicon and every kind of wave of technology transformation since. And our mission is to help the daring build legendary companies from idea to IPO and beyond. And we are very proud to have FTX welcome us on their journey to help them do that. So, it's awesome to be here.   

Tristan Yver:  

Wonderful. How about yourself?   

Michelle Bailhe:  

So, I work on our growth team. And I spend a lot of my outbound time in crypto. I work really closely with FTX and Fireblocks. And we just signed a term sheet this morning for another company in crypto that I'm really excited about. We're all generalists. So, I work with companies across gaming and fin-tech and software. But I love crypto and I love the founders that I meet in the space. And so, it's been really fun to dive in since I've joined.   

Tristan Yver:  

Thank you. Thanks for that intro. And so, I guess to kick things off, how did you join the venture space? Where did that path begin?  

Michelle Bailhe:  

Yeah. I never would have told you that leaving school. So, I guess the short and hopefully non-boring version of the story would be I started off working at McKinsey. And got to just learn how great leaders and organizations run and some less great ones, but a lot of great ones.   

Michelle Bailhe:  

And when I was there, we were doing things like building technology for some of our clients. And I thought this is crazy. I don't know how to actually build technology and I should go to a real place that knows how to do this and learn. So, I went to Google. And at Google, I worked on this team that actually had a lot of crypto DNA oddly.   

Michelle Bailhe:  

So, the artists behind CryptoPunks were there before I was there. And they tried to share their art with everyone on like a Monday morning meeting. This is before I got there. They were like, "Hey, guys, meet these cool characters on Ethereum and let us know if you want any." And everyone was too lazy to figure it out. Sad now.  

Michelle Bailhe:  

And then, my friend [Kallie 00:02:55] is there who's a designer and early founding member of the Uniswap team. Anyway, so it's just funny how that happens in life but that was a great experience to work with designers, engineers, filmmakers and just make stuff as fast as possible.  

Michelle Bailhe:  

And I learned a lot in that time. I went to go to learn about building technology which we did, but I learned so much more about storytelling in that time and about how important it was when you're talking to developers, that that's a very different type of storytelling and marketing, if you will, than anything else.  

Michelle Bailhe:  

And so, one of the best things you can do to get developers to build on you is to build epic stuff with whatever you've built. And so, we did stuff like that where we just did crazy projects just to get attention and show the potential of the technology that had been built within Google.  

Michelle Bailhe:  

And then when I was there, I started doing some early-stage investing scouting and really loved that but I didn't know what made a really high-quality business. And I wanted to learn that and I figured the best place to learn that would be in private equity. And so, I went to work for a private equity firm here called Hellman & Friedman. And I worked so many hours and I'm grateful for every one of them because I learned so much.  

Michelle Bailhe:  

It's a very intellectually rigorous and honest firm which I liked. And I just grinded it out for two years or a year learned a ton. And then Sequoia called me and I was very lucky and grateful. I still don't know why they called but I'm very happy they did and landed here. And it's been an amazing year. It's obviously been one of the craziest years in terms of fundraisings. It's broken tons of records. And so, it's been a great time to learn because I'm sure if I joined another time, it wouldn't be this level of learning. 

Michelle Bailhe:  

And I was challenged early on by mentors that said, "You should build your own perspective on where you think the most important technology companies will be coming from and do a lot of work to get to know those founders and understand the space." And I thought crypto is one of those. And so, dove into that and worked with many of the partners. It's a firm-wide focus. So, a lot of us worked on it but I tend to spend a lot of energy on it. So, that's me.  

Tristan Yver:  

Okay. There's so many things I want to pull on from there. But actually, I think what maybe the most important or at least something that resonates with me personally is this whole storytelling aspect which is sort of the crux for the success of a lot of these different companies and founders. And I'd love to hear from your perspective sort of what is storytelling and what's the power that it holds?  

Michelle Bailhe:  

Yeah. So, I think we're all humans. Humans are fundamentally a storytelling species. We connect so much more with a story, a character, a person, a why than any other piece of information than even any utility. And so, it's just core to connecting with humans. Like if you need a human to feel an emotion about a thing, it is better to tell a story than to do almost anything else. 

Michelle Bailhe:  

That story has to be true but it's better to tell a story. And so, I grew up in a family with a lot of artists. My dad's a filmmaker in advertising and stuff. And I think I just had always known that it's not enough to have the best technology or the best solution for anything. You have to be able to help people understand. My VP at the Google Creative Lab used to say we need to bring the toys to the kids. Like kids need to know that the toys are there and exist and you have to tell them about it. You can't just have the toys.  

Michelle Bailhe:  

And so, I think that is a big difference. If you look at the most successful technology companies of all time, I would say a huge part for instance of Google’s success, and why I would say this may be a hot take, Google is less loathed and a little bit more loved than some of its peers in the mega-cap tech companies space. And I think a huge part of that is because from very early on, it told its story on how it made people's lives better.  

Michelle Bailhe:  

Not just saying we're a big company and we're fancy or whatever, it told a really human and compelling story of how it made your life better to be able to find information at your fingertips. I don't know if you remember but one of the first Google, the first Google Superbowl ad was someone typing, and it was just the search bar, and someone was typing for how do you study abroad in France, and then asking a girl on a date, and then it ends with how to assemble a crib. And you get this whole beautiful life story told just through search which could otherwise seem like this dry product.  

Michelle Bailhe:  

It's like the Yellow Pages online. And I think things like that where you humanize what you're really doing in a way that's very positive and true for people, that is how we all use Google. And if you go through your search history, you probably would find a lot of things that tell the story of your life. That makes you connect with the product on just a different level than if you just have a utility value prop or even a shiny value prop.  

Michelle Bailhe:  

And so, that's why I think it's important. It's something I've always connected with and I've seen the value it creates for companies.  

Tristan Yver:  

Yeah. And I think that was a really interesting example, too, because you mentioned the company who told their story from the company's perspective and still engage people's imagination because the counterpart to that are all these mega-companies who did it from the founders' storytelling perspective, like the Steve Jobs and the Elon Musks, or the Bill Gates of the world who built this narrative out from their personal story. And then I guess Google did it from a company perspective.  

Tristan Yver:  

So, I guess you don't think about like Eric Schwartz that much. These guys aren't necessarily top of mind. But these other ones have these founders. I wonder, I guess from your perspective what do you think is more interesting, a story told from a company making it humanized or from a founder who directly relates to other humans?  

Michelle Bailhe:  

Yeah. It's a really interesting point. I think both are quite powerful. So, what I think is interesting is if you look back at early Apple ads that they had started as a company. And so, one of the most famous ones is this kind of a 1984 Big Brother moment where there's this runner and she's running with a hammer and she throws a sledgehammer at the TV. If you watch it, it's great but it's like tearing down Big Brother.  

Michelle Bailhe:  

And it's trying to position Apple as the rebel and the underdog and the design first company that was going to humanize computing and make it personal and make it beautiful. And so, I don't think it's actually an either/or. And I think the founder has to be amazing enough to pull it off. But I actually think you can have both.  

Michelle Bailhe:  

You can have companies try to tell the story around what they're trying to be at a different moment in time. And sometimes looking back, you think that's crazy. Apple's not the underdog anymore but they were at the time. But you can also tell the founder's story which people will connect with in a different way depending on who that person is.  

Michelle Bailhe:  

Are they the archetype? You think of like the Jungian archetypes or these heroes. Are they the tinkerer? Are they the underdog? Did they come through some big personal challenge? Are they irreverent? Whatever that personal story is I think can be additive and is not an either/or with the company.  

Tristan Yver:  

Yeah. No, I think you hit the nail on the head. I think it comes down to archetypes and what resonates within us like in our DNA because we've just been having it pushed into us for eons and eons and eons. I guess a question on this then. So, was Sam the storyteller here? Did you guys go into FTX because of Sam's narrative or because the story that FTX told?  

Michelle Bailhe:  

So, it's so funny because I actually shared before we ever met Sam in an official-like Sequoia meeting, I had sent this email to all the people that are on our side that were going to join about, "Guys, don't ask silly questions in the meeting. This is an amazing company. Please bring your A game." Not that anyone does but we have a big range of partners and not everyone follows crypto as closely as others.  

Michelle Bailhe:  

And so, I was like, "Please don't ask what FTX does if you don't know. Let me tell you right now." And so, I said that before we ever met Sam. And Ramnik was joking later with us being like, "Did you guys just invest because Sam was so charismatic?" And Alfred and I were like, "No, we do our homework. We did our homework way in advance. We knew FTX was this amazing company. And we also knew Sam was an amazing founder."  

Michelle Bailhe:  

But so then, in the meeting, I think what we loved about Sam is, yes, he is an amazing storyteller which I think is important to create truly legendary companies. But it's also just his clock speed is just breathtaking. You work with him. It's just a breathtaking clock speed. And we meet people all day long and you can just tell the difference.  

Michelle Bailhe:  

And every question we asked, he had thought about it from a hundred angles and knew what he thought. And maybe you could disagree and say, "Oh, I’d make a different trade." It doesn't matter. He's thought about it inside and out. And you could introduce new information and he would opt ... You could see that it's just the wheel is turning faster than most other people that we interact with.  

Michelle Bailhe:  

And so, I would say storytelling is a big part of it. And his clock speed and his vision for where he wants to take FTX were very compelling. But we had also come in with many of us who spent a lot of time in crypto having huge respect for the company and what it was already achieving because Sam is not the most low-key founder. He's very [inaudible 00:13:16]. You can learn that he is great on a lot of different avenues before you meet him in an official meeting.  

Tristan Yver:  

Yeah. No, absolutely. I mean, we've worked on that and giving the world exposure to Sam because Sam is remarkable. And I think when people get the chance to be exposed to that, they think, "Wow, this guy is just on another level." And it's so true because going back to the clock speed thing, he's probably on the highest clock speed out of anyone I've ever interacted with.  

Tristan Yver:  

So, I want to ask you I guess like not to put anyone else down but people have intelligence across different layers and there's more emotion, whatever. But out of all founders that you've met I guess in your career in venture capital and at Google, all these different things, does he stand out as perhaps the most remarkable or how would you classify him?  

Michelle Bailhe:  

Well, it's very tough because I work with a lot of great people and Sequoia works with a lot of great people. But I would absolutely say Sam is in the top three of people that I've ever met and one of my personal favorite people to ever interact with. So, yeah, he's up there in it. Everyone at Sequoia feels the same way. It's not just me. I mean, we love founders like that that just take your breath away. It's just the most fun thing ever.  

Tristan Yver:  

And that's my next question I guess and what I was trying to feed into is your guys' job is like ... I know it's a lot of work but it's quite pleasurable because you get to meet the brightest and the most motivated, and you get to see their visions and they take the time to tell you their stories when mostly they would never take that time to really describe what they're doing.  

Tristan Yver:  

I'm sure being in venture, would you say it's been the largest learning experience out of the different things that you've done, or is it different? 

Michelle Bailhe:  

Yeah. I think that's a very wise way of looking at it. I think it's the most optimistic job I've ever had because for instance to contrast when I was at McKinsey, you're working with people who are often struggling with challenges. They're already usually huge corporations and they're dealing with how do we not lose market share, how do we continue to grow, how do we keep people happy, how do we deal with whatever? And it's so different to work every day with people who are just trying to make a corner of the universe better.  

Michelle Bailhe:  

And that's how we meet all day long. And so, it's just the most lovely, optimistic job because whether or not we get to partner with them, I am so encouraged by the quality of people that are just dedicating their life to making some little corner of the world better that you just feel happier and you feel more optimistic because you think, "Okay, there's a lot of problems with that but I met 12 people this year who are all really smart, who are working really hard to try and make stuff."  

Michelle Bailhe:  

So, hopefully, one of them or all of them will succeed. And so, yes, it is a ton of work, but it is the best job I've ever had. And the learning has been amazing because of the variety across industries, across companies, across people, it's unparalleled.  

Tristan Yver:  

So, all these different corners that you're getting a chance to explore, you'd say that cumulatively you're just very optimistic that they're making the world or will make the world a better place?  

Michelle Bailhe:  

I certainly feel more optimistic about it that there are people really trying and that we now live in a moment of time in history where that's possible. I mean, so many other eras of human history, that wasn't possible necessarily. It was a privilege for the select few and we still needed to expand. But I think the earlier eras of technology have made it easier and easier and buzzword like democratized the access to building things.  

Michelle Bailhe:  

And so, there are just more and more people that are willing to do that and willing to jump out of safe career paths and take a huge risk and try. And luckily, the rewards are there if you succeed which is great. We should have that for people who take that risk whether it's founders or their early employees. So, yes, it's very optimistic.  

Tristan Yver:  

Okay. I'm going to put you on the spot. What are some of these corners that are fascinating and that people should be paying attention to?  

Michelle Bailhe:  

Well, crypto is one of my biggest that I'm paying attention to that all people doubt. We can talk about that or I can give you other ones if you ...  

Tristan Yver:  

Give me just like a cursory list and then let's dive into crypto if that sounds good.  

Michelle Bailhe:  

Okay. So, there's a lot in crypto. I think there is still a lot if you think about ... I'll go through kind of different sectors. I think there's still a ton in enterprise infrastructure. Like the shift to the cloud, we talked a lot about how we often underestimate how big some of the mega-trends are. Whether it's mobile or eCommerce or cloud or crypto, you can think there's so much success that's been created. "Oh, my gosh, are we done?" No, you're a 10th of the way if that. 

Michelle Bailhe:  

And so, I think even though there's a lot of excitement about it, I still see so many opportunities especially having worked inside larger companies where I know that they're years away from the speed at which ...  

Tristan Yver:  

Yeah.  

Michelle Bailhe:  

It's like two worlds where you're like, "Oh, my gosh, we still have a long way to go actually." So, there's still tons to build to help companies meaningfully move to the cloud and to realize the promise of every company becoming a technology company. It's something we talk about a lot and that's happening. And you see more big companies.  

Michelle Bailhe:  

I had clients that I work with and we were building stuff that didn't have a single developer. And now, I can look on LinkedIn and they have 30 developers. And so, that's going to happen even more and more. So, there's still a ton to build there. There's a ton of cool stuff happening in genetics and genomics and transcriptomics. I love reading nature and science. So, we could talk about that at any time.  

Michelle Bailhe:  

I think consumer tech is at a really interesting moment where for a long time, things have gotten sucked into the mega-platforms and it's been hard for other startups to be really able to make a dent in something new. I think crypto and years of the pandemic, etcetera, have really opened up opportunities for consumer founders, for social founders. I'm very excited for the next wave of that.  

Michelle Bailhe:  

Gaming, people are finally realizing is not a niche thing. When I was at Google, I helped work on studios launch. And people still think gaming is like a niche population and you're like, "What are you talking about? Billions of people game. It's this huge space." And so, that's exploding which is great. Tons of really high-quality people going into that. Those would be some of my areas that I think could be overlooked, but hopefully will not be for much longer.  

Tristan Yver:  

Okay. So, what are your thoughts on this? The biggest lesson I want Web2 to learn from Web3 is this interoperability between each other using SDKs or APIs. And I really hope that the transition from Web2 to Web3 happens in a way in which at first, Web2 companies open up their APIs so people can come as a third party and grab different APIs from different components and make amazing things together.  

Michelle Bailhe:  

Yeah.  

Tristan Yver:  

Do you think that's just way too optimistic to think it will happen? Or do you think maybe we have a world in which something like that happens?  

Michelle Bailhe:  

No, I do not think it is too optimistic. And one of my favorite things is that people who are building in Web3 and crypto are stunningly optimistic. And I think that's important. We were just talking with Roelof Botha who leads Sequoia US today and we do this thing on Fridays where investors will tell the story of a company. And so, he was telling the story of YouTube which is such a crazy thing that years ago, he could say, "Hey, maybe billions of people will upload videos to this thing called the internet and they'll share them with each other and that will be a business."  

Michelle Bailhe:  

That's insane. And he was even saying today, two million people we think on a weekly basis, I could have the stat's wrong, I should Google them, are using YouTube. I mean, you couldn't even have imagined at the time, there weren't two billion internet users, that it would reach that scale. And so, I don't think it is naive to think that that is possible because I think it's something users are demanding. And eventually, if you have enough users demanding something and enough developers willing to build it for them, usually that happens.  

Michelle Bailhe:  

And so, it may not happen in exactly the way that we would project right now. And there may be business model struggles and there will people who will try it and it won't work and they'll cave and they'll close things off. But I think the trend towards more and more open source is happening in all of software and all of technology. And so, I don't think that that's too optimistic. I think it may take 10 years or who knows, but I think there is enough energy from users and developers around this idea that I believe it is an important one.  

Tristan Yver:  

Sweet. Thank you. And are Sequoia's Web3 investments hedges on their Web2 investments or strategic investments?  

Michelle Bailhe:  

They’re definitely not hedges on our Web2 investments. I think the cool thing about being here is that we've always invested in the next era of technology. And so, crypto is no different. And we started investing in crypto companies out of Sequoia in 2017. And we're still doing more. And as more and more founders jump into the space, we're doing more and more and more.  

Michelle Bailhe:  

So I wouldn’t say they’re hedges at all. I think two things will happen. One is that we'll continue to invest in and back great founders building in Web3 and crypto and this whole new wave. But the other thing that I think people are underestimating a little bit right now is that a lot of the Web2 companies just like in the desktop to mobile shifts or web to mobile shift, some of those companies will make the shift successfully. 

Michelle Bailhe:  

So, there will be "Web2" companies for instance you saw Stripe's announcement, right? The call center has very smart people. They've been thinking about crypto for a long time. This isn't a new idea. There will be companies that will successfully make the shift that will be part of this in a positive way that we are probably counting out right now.  

Michelle Bailhe:  

We had an event, for instance, a Sequoia Basecamp event where we have all our founders together for a night and we do glamping. And three different founders with totally separate businesses (one is enterprise software and gaming, one does consumer livestreaming, and the other does shopping) were [all] talking to me about NFTs. And it was just weird within like a one-day period.  

Michelle Bailhe:  

So, I think some of the companies will make the shift to Web3 like they made it to mobile and the ones who don't will get left behind.  

Tristan Yver:  

And when you're like a really big venture firm like let's say you have a Web2 investment and then there's a Web3 investment whose sole purpose is to disrupt the Web2 investment, does that make it harder to invest in the Web3 one or are you guys able to portray it as a completely separate field?  

Michelle Bailhe:  

Well, I think what's interesting is the choice of portray. So, I think we have to be intellectually honest. If we're still deeply involved with the company and still on the board, we have to manage conflicts really carefully and we do that with each founder on a founder-by-founder basis. So, the person whose point at Sequoia will talk to that founder about it.  

Michelle Bailhe:  

And the thing is that this is not a new issue because of Web3. This has been great. Throughout history, there's been new startups that compete with incumbents and we back the incumbent and then we do the new one. And so, you have to navigate that on a case-by-case basis. My favorite thing is that, at least so far in crypto, I feel like the conflict concerns are not actually about whose businesses are potentially competitive. They're just about who has beef with someone else.  

Michelle Bailhe:  

They're totally unrelated businesses but people would be like, "Don't invest in that." And then these are totally competitive and they're like, "Oh, it’s fine. I like those guys." Okay. I'm just going to ask you to do it on a case-by-case basis. So, we manage that carefully. But no, we back founders who are building important things and we'll figure out how to work with them.  

Tristan Yver:  

Okay. So, that's really cool. So, you guys have a lot of communication with these founders that you're backing then it's not an offhand process in which you guys invest and then it's sort of like let them go off to the races?  

Michelle Bailhe:  

No. There's a big active conversation throughout. I think we take it probably more seriously than any other firm. And we've been debating actually about whether founders appreciate that or not. The founders that we work closely with seemed to appreciate it a lot. And we try to be really careful.  

Michelle Bailhe:  

Because we're not just passive money, we want to be real business partners not where it's overbearing and we're like in your hair, but we are partners with you for a decade or however long you want. And so, it's not okay to back a direct competitor that's going after you if you're not okay with that. And so, we manage that very carefully.  

Michelle Bailhe:  

And the founders are very thoughtful about that as well. And so, we work on it together but we take that really seriously. And we’re always very careful with the founders to discuss how that happens. Sometimes we invest in two companies with no ... They have no plans to compete against each other whatsoever and years later, they end up colliding. Then we still have to manage that really carefully where certain people will leave the room to discuss or give an update on another company because that's not appropriate to share information.  

Michelle Bailhe:  

So, we have firewalls. We have all these things. We have long list of ways to manage it, but it is certainly done on a founder-by-founder basis with a lot of closed conversation.  

Tristan Yver:  

Got it. And can you walk me through the investment process?  

Michelle Bailhe:  

Yeah.  

Tristan Yver:  

Yeah, just general.  

Michelle Bailhe:  

So, there's a range of ways we can get in touch with a founder or a company. Most of my investments, I find it on Twitter and I reach out just like I reached out to you on Twitter. So, a lot of Twitter friends. But somehow, we find a company or a founder [inaudible 00:27:47]. Either we reached out or someone else told us, "Hey, someone we respect just joined this company," or whatever. We get flagged. And then we go meet with them.  

Michelle Bailhe:  

And we try to move extremely quickly. And so the way that we do that, especially in this year, you might have to make a decision within five days or less, is to have a prepared mind on categories and areas. So, we do a lot of outside work, a fraction of which we actually publish, on each different industry. What's happening and what are the most important companies we have data science signals on.  

Michelle Bailhe:  

What employees left this company to go here that we're constantly watching and learning from, and we're talking to people building whether they're PMs or engineers or builders or founders in the markets all the time to try to understand what are important trends and what are the most important companies in those trends. So then, when we meet a company or a founder that we think is really interesting that we are paying attention to because it's a space we've decided that we like a lot, we go into diligence mode.  

Michelle Bailhe:  

And that looks different depending on the company. Sometimes we do a bunch of customer references. Sometimes we analyze a bunch of data, sometimes both, whatever. We do a bunch of diligence. We spend time with the founder. We get to know why we think this is a really special founder who could build a gigantic legendary company. And then, we write a memo. And then, we send it out. And on Monday partner meeting, we talk about it with all the partners.  

Michelle Bailhe:  

That is like an intellectual cage match, if you will, about the quality of a business or an idea or a team and people will debate. And it's very free-flowing but it's great and it's all kind of meant with love. And then we make a decision. And then, hopefully, the founder wants to work with us, too. And so, we work really closely to invest thereafter and then help them build a company.  

Michelle Bailhe:  

And so then, we never congratulate people on investments. You only congratulate people on succeeding in helping the company. So, people will just say, "Now, the work begins." There's no like points for doing deals or where a deal is banned. That's just a milestone to begin the partnership. And then, it's the hard work of everything else.  

Tristan Yver:  

Right, because that's where all the upside is, and actually making sure these guys succeed.  

Michelle Bailhe:  

Yeah. And that can take a lot of different ways. I think people ... Before I joined for instance, people talked a lot about board meetings. I don't find board meetings the most helpful way to help companies. It's like every other text in between every day on, "I need to hire this person. We need someone with this regulatory context. Can we get this press to cover us?" We're having this strategic problem."  

Michelle Bailhe:  

Whatever it is, it's all those in-between moments where I think you're actually the most impactful and some of the kind of crucible moments that the company faces. They're not scheduled. [We contribute] by helping the company in whatever way they want help through that whole leg of the journey.  

Tristan Yver:  

Yeah, no, it's been beautiful for me to see how valuable relationships are in all this. I think that the most important thing that I've been able to do for companies I've helped is just introduce them to the right people at the right time.  

Michelle Bailhe:  

Yeah.  

Tristan Yver:  

And I imagine like for you is that just a big part of it is having a sufficient network that you can always plug in people where you need to when you need to?  

Michelle Bailhe:  

Yeah. I think that's really well said and it makes a lot of sense. Yeah. I mean, for me, I try to be humble. I've never been a founder. I don't know the answer to every single sales or marketing or product or engineering question. And I'm not going to try.  

Michelle Bailhe:  

I think one thing that bugs me more than anything is when people waste the founder's time by giving them an answer that's a low-quality answer. So, I never want to do that. If a founder has a question and I don't know how to deal with it, I will use the ridiculous Sequoia network to try to find the best person to answer that question or give insight on it if they're considering multiple perspectives.

Michelle Bailhe:  

So, I certainly agree like there's no person in the world who's dealt with every single issue a company could face. And so, you do have to know a breadth of people who are just phenomenal at different things so that when things come up, you have someone that you can suggest as, "Hey, this person is great at x, why don't you talk to them and see if they could be helpful?" So yeah, I agree. I think that is one of the best value ads.  

Tristan Yver:  

And this is definitely an apart, but something I've been thinking about is how Web3 in some ways does erode venture capital firms. An example of this is the people who all quickly put money in for this Constitution DAO and had raised enough capital to buy something enormous out of the blue which is like the function of venture capital firms essentially like, "We'll take your money. We'll invest and we'll give you returns, but we'll take fees for that."   

Tristan Yver:  

What if these structures become, as you say, democratized to the extent where it's just all like DAO-based? Wouldn't that potentially really harm the venture ecosystem or is there something I'm missing?  

Michelle Bailhe:  

Yeah, it's really interesting. The short answer is I don't know. I think the funny thing is that venture capital is an industry just like every other industry. And everywhere else just like in core biological ecosystems, you can evolve or you can die.  

Michelle Bailhe:  

And so, there have been many challenges to the model of venture capital. And it will either evolve and continue to be useful or it will die. So, I think for Sequoia, we are permanently paranoid, always. We are always paranoid that we are not as helpful as we want to be or as not as great as we want to be. And we are always debating, do we have the right model.  

Michelle Bailhe:  

And I think that was a huge reason for the Sequoia fund was this very long-term model where instead of having to sell shares or tokens in a company, just because it's gone public and now you have these LPs who might want liquidity, but that hurts the founder in some ways because you're just selling the stock and you're potentially ending the relationship with the company, even though they still need help building and they still want a relationship and they don't want the stock to go down because there's a bunch of extra supply in the market.  

Michelle Bailhe:  

That's silly. We don't want to do that. They don't want to do that. And so, that was a lot of work to innovate on a new model of what does that really look like. And I think we will continue to innovate for the product for the customer. So, what do founders ... As long as we believe founders will exist and people will found new companies, there should be a product that we can offer to help them do that.  

Michelle Bailhe:  

And maybe it looks like a DAO in the future or maybe it looks like something else. But either we will succeed in creating it or we will die and then we will have deserved it.  

Tristan Yver:  

Thank you. Okay. This next question, I actually asked it from genuine curiosity and not because I know it's a buzz topic, but I'd love to hear your thoughts on how do we get more women in the venture space and crypto interested in these fields to keep growing out that diversity which I think is pretty important?  

Michelle Bailhe:  

Yeah. I'm curious for your view because everyone has different circles. And so, I always wonder if my echo chamber is more slanted towards women just because I am a woman than others. But I've actually been pretty surprised with how crypto as a technology movement feels a little bit ahead of where Web2 was at this time in terms of representation.  

Michelle Bailhe:  

There's still a lot more to go. But for instance, FTX has a huge number of extremely senior women. And there are many other firms where lead investors covering crypto and other things are women. And so, I'm actually pretty encouraged that we are off on a better foot than others. And that two, there are more role models on the building and investing side than there would have been for instance when I was in college.  

Michelle Bailhe:  

I remember looking at a lot of venture firms' websites and seeing no women and just thinking, "Okay, it's like the NBA and you have to be 8’ tall and I'm not." And so, I have hope. But I think in terms of what else we can do like hire great women and don't write trash on Twitter and Discord, it's probably a good way to start.  

Tristan Yver:  

Yeah, totally. So yeah, I guess I have some thoughts. And when I started the podcast, it was like 99.7% male, 0.3% female. We're definitely getting better. I think we're at like 8% women now versus men.  

Michelle Bailhe:  

Yes.  

Tristan Yver:  

But it's definitely still a very male-dominated industry. But what I've seen is I've actually introduced some friends into the industry and they're doing fine but they just needed this segway, this introduction of like, "Look, there's all this cool stuff happening here. You want to look at it and talk to the team and see if it makes sense to work with them?" And then they're like, "Yeah, sure."  

Tristan Yver:  

And I wonder if part of it is this whole thing is portrayed in a way that makes dudes initially have that first interaction that then gets them deeper. But it gets a little bit harder for that first interaction for a lady to look at him like, "Oh." But the second they actually understand more, they're like, "Okay, this is sick. I'm going deeper." And I don't know how we change that.  

Tristan Yver:  

Maybe just continuing to grow the space for everyone and getting more people excited to work in it. But I mean, there's definitely kick-ass lady founders in the space and people working in it, too. I like seeing it. It brings good balance. I think at FTX, too. It's great to change it up a little bit.  

Michelle Bailhe:  

Yeah. I mean, I think that's very well said. And I think for your platform, you have this great platform on the podcast. The more you can tip the scales so that there's more representation than maybe there is in the true field, the better because that will be a leading indicator and will grow the space. So, I think you're doing the right thing.  

Michelle Bailhe:  

The more people you can have on where you can highlight and show that those stories exist and they're real so that other people see them, the better. Because I think that's one of the interesting things with it's almost a con in a way of the anon culture of crypto is actually you don't really know for a lot of people where they're coming from.  

Michelle Bailhe:  

And I really respect the anon movement and people wanting privacy like that's great. But it is funny to think, "Okay, how do we solve the privacy challenge and the wanting to see representation so that you know you can be challenged?" I don't know how that will shake out.  

Tristan Yver:  

Yeah. I mean, to be completely honest, my curiosity really only stems from the fact that we're half of the population. If only one half is interested in, it's not going to get to where it can go. I think we need everyone behind it to grow this to where it could actually get to. So, that's why I asked. I just want to really make this something massive and widespread and not be segmented anywhere because if not, we're probably not going to break into the mass consciousness.  

Michelle Bailhe:  

Yeah. I think that's really well said. I think one of the things that contributes to that is the early narrative around a lot of technology. If you look back at early startups when Bill Gates was on the cover of Fortune, etcetera, and then now, I think in the beginning of crypto, there is a narrative that tends to be perpetuated especially in developed economies where the point of engaging is for wealth.  

Michelle Bailhe:  

It's not for impact. It's not for the good of something else, not for the good of users. It's just for wealth. And I think my gut, I don't have data to back this up, but my gut is that that old “why” or that mission is less attractive to a lot of women. Not that women don't want wealth, but doing something just to be wealthy has less social capital for women. And so, it's less attractive.  

Michelle Bailhe:  

Whereas if you say, "We're going to build something world-changing," or, "We're going to bring billions of people into a more inclusive economy," or, "We're going to crack this incredibly hard math problem," like those things tend to bring more diverse groups in who haven't been socialized to be rewarded for wealth alone. And so, I think that's one of the things that we could see broadening.  

Michelle Bailhe:  

And I think you work a lot on the NFT platform. I think these broader consumer use cases bring a lot of people into the space because it's about something else. It's about rewarding creators or being a creator that can be rewarded. There's tons of women creators who would I'm sure like to be better rewarded. Those like we brought up in the use cases beyond just the narrative of exclusively finance I think will have more and more people who have more diverse demographics and also contributions to the space.  

Tristan Yver:  

Yeah. No, I think that's it. I honestly think that's it. You need to switch the focus from a thing achievement to a human achievement and then you get everyone on board. Okay. That's food for thought. Definitely, I'm going to keep that in mind.  

Tristan Yver:  

So, I guess a couple more questions. One more is what is some advice you could give somebody that wants to enter I guess either potentially as a founder because you interact with so many of them or someone that's able to support founders?  

Michelle Bailhe:  

Yes. Well, you support founders. So, I would love to turn the question around on you, too. I don't know that I have great advice for founders having never been one. I hesitate to always be an armchair quarterback. I guess I would hope that if you feel in a space in your life, I think there are a lot of people who just can't yet but if you can feel the space in your life where you can take a risk, take smart risks. It's worth it.  

Michelle Bailhe:  

And so, if you don't feel constrained by your current options, do the risk calculation but make sure you calculate the upside if you want to jump. And think really hard about the people that you surround yourself with early on. Most of the companies that we work with, that can be very promising. The biggest killer is cofounder dynamics or people problems.  

Tristan Yver:  

Yup.  

Michelle Bailhe:  

So, you just have to be careful that you're with people that have really good values and are honest and transparent and have high integrity, and you'll work through challenges. The same way that you talked about the importance of relationships that you would want in any other relationship, friendship or otherwise, it's really no different.  

Michelle Bailhe:  

For people who want to get into helping, I think there are so many ways to help early companies now. There are, of course, firms like Sequoia and we could talk about career paths to get there. But the angel investing space has exploded. And I think that's so exciting.  

Michelle Bailhe:  

And then, there are also operators, so you are both an operator at FTX in addition to all the other things you do. Those operators are so helpful to early companies that are either navigating relationships or navigating challenges or need to talk to someone who has figured out something else first. And I've seen a lot of operators at companies get a lot of joy out of helping early companies. And I think they should feel emboldened to do that.  

Michelle Bailhe:  

And I think it's sort of funny sometimes. I talk to great operators and say, "Hey, have you thought about advising this company?" And they're like, "Oh, I don't know. Would they want me?" I'm like, "Yes, they would definitely want your advice." Everyone wants the advice of people who have climbed that mountain before. Even if they don't take it, they'll definitely want to hear it.  

Michelle Bailhe:  

So, that's what I would say but you do this a ton, so what are your tips?  

Tristan Yver:  

Yeah. It's people. My barometer off if a project is going to do well and if they're worth the time. It isn't their idea or what they want to build, it's the people behind it because they can always just pivot what they're building. It doesn't really matter. And I've actually luckily had a pretty good gut feel so far with the people I've worked with.  

Tristan Yver:  

But I would say if you're going to start something, do it with people that inspire you. Sam has been able to build as much as he built because he's inspired so many of us and he's also worked with people that inspire him like Caroline from Alameda Research. There's a lot of really special people that I know Sam also really, really respects and created this core group, Gary and everything. So yeah, people.  

Tristan Yver:  

And then I think from the helping founders side, the biggest value add I've given probably isn't specific advice or maybe even the relationships. It's just telling them, "Dude, you can do it." Just literally pounding into them that you are capable of doing this, stop doubting yourself, and then watching them go out and just absolutely crush it.  

Tristan Yver:  

So, I think those are the two. It's like these people need belief systems like they have people telling them, "Oh, are you sure you want to quit your job to start the startup and all this risk involved?" They have so many naysayers, that what they really need is someone on their shoulder telling them like, "Fucking go for it. Just go."  

Michelle Bailhe:  

I love that.  

Tristan Yver:  

So, that's my sense.  

Michelle Bailhe:  

I love that and I totally identify with that. There's an early founder that I work with. I remember just a couple weeks ago, we were having a conversation. And he gave his idea of how he wanted to solve a problem. And he's like, "Does that make sense to you?" And I said, "Yeah." He was like, "That's it?" And I was like, "Yeah." And he was like, "You've been 90% right about every other decision. Why wouldn't you be 90% right about this one? I trust your judgment and you should, too."  

Michelle Bailhe:  

But I think at the early stage, when you don't have as much external validation proving to you that you're succeeding yet, it's really hard. And so, you need other people before you have any numbers or dollars to prove that you're succeeding to say, "No, that makes sense and you do have good judgment. And you've been making the right call so keep making calls because you're probably correct."  

Michelle Bailhe:  

But that's hard. I agree that self-doubt is one of the hardest things a lot of founders go through.  

Tristan Yver:  

Yeah. I guess a message to all the listeners is if you have friends and family who are trying to take risks to better themselves and do interesting things, support them, give them your backing. There's probably never been a better time to do it than now. And there will always be jobs to fall back on if things go awry. But we have this life might as well really try and maximize and have fun while at it.  

Tristan Yver:  

Last question for you, Michelle, so what is some lesson or habit that you've learned or picked up that has benefited your life and that may benefit others?  

Michelle Bailhe:  

Well, the first one coming to mind talking to FTX on this podcast is speed. I love how fast everyone at FTX moves. For instance, we just talked yesterday and you were like, "Yeah, you want to come on the podcast, great. Let's schedule it."  

Tristan Yver:  

Yeah. 

Michelle Bailhe:  

That is such a superpower, to move extremely quickly and not where you're not thinking about things but not overthinking things, not delaying things, not exploding things where they need 10,000 signoffs or production, quality, etcetera. Moving really fast is a superpower.  

Michelle Bailhe:  

And that's something I've learned from work experience and then I've learned at a different level from founders and everyone I work with at FTX where I try to have what I call five-nine uptime for the founders that I work with and move as fast as they move, which I feel like I have to work really hard to do for FTX because I've had situations where Sam asked or something. And even I respond in 24 hours and he's already solved it and I'm like, "Crap. How are you doing it faster?"  

Michelle Bailhe:  

Okay. So moving really fast I would say is the habit that I tried to absorb for my great founders and give back to them. 

Tristan Yver:  

Sweet. Well, thank you and thank you so much for coming on the podcast.  

Michelle Bailhe:  

Thank you so much. So good to talk with you.  

Wrapping up with Michelle Bailhe 

We hope you enjoyed our slight detour from the world of crypto into the world of VC investing. Both worlds overlap, but it’s interesting to see how both operate somewhat independently, as well.   

If you listened all the way through, there’s no doubt that you left with some great nuggets of information. As always, if you’re hungry for more, FTX has more brilliant podcast guests and blog articles to keep you informed.

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