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There is a time-honored crisis management strategy, wherein one says nothing and waits for the outrage to pass. For Sequoia Capital, the strategy worked pretty well this week. While partner Shaun Maguire initially weathered criticism<\/a> over an inflammatory social media post, that initial indignation cooled quickly. Now, some seem to think that Maguire\u2019s defiant stance may even be strengthening his position. Business Insider actually called it \u201cgood for deal flow<\/a>\u201d \u2014 controversy as competitive advantage.<\/p>\n Sequoia\u2019s calculated gamble carries real risk, though. Another provocative post from Maguire that hits the wrong nerve, a shift in political winds, or escalating consequences could quickly transform their unflappable partner from an asset into a liability the firm can no longer afford to ignore. <\/p>\n A crisis communications professional who has managed reputation disasters for dozens of major brands tells this editor, \u201cFirms like Sequoia are bulletproof until they aren\u2019t.\u201d<\/p>\n What happened<\/strong><\/p>\n Sequoia\u2019s hands-off approach was put to the test earlier this week when the storied venture firm found itself in the eye of a storm over Maguire\u2019s comments about New York City mayoral candidate Zohran Mamdani. Maguire called him an \u201cIslamist\u201d who \u201ccomes from a culture that lies about everything\u201d in a July 4th tweet <\/a>on X that has since been viewed more than five million times. More than one thousand signatures have poured in since on a petition<\/a> demanding that Sequoia condemn the remarks, investigate Maguire\u2019s conduct, and apologize.<\/p>\n There\u2019s been a lot of talk about why Sequoia hasn\u2019t done this, with many outlets noting that Maguire isn\u2019t just any partner. This status owes partly to his friendship with Stripe co-founder Patrick Collison. According to reports, at a 2015 Founders Fund event, Maguire\u2014then a Founders Fund-backed entrepreneur\u2014defended Collison during an argument with Anduril\u2019s Palmer Luckey about quantum computing, earning Collison\u2019s friendship. The connection proved valuable when Maguire joined Google Ventures in 2016; he helped secure a $20 million Stripe investment during his first week. When Maguire left Google Ventures in 2019, Collison personally recommended him to Sequoia\u2019s partners. (Stripe has been in Sequoia\u2019s portfolio since 2010<\/a>, with the firm investing more than $500 million<\/a> over 15 years.)<\/p>\n Maguire also led Sequoia\u2019s investment in Bridge, a stablecoin platform that Stripe acquired for $1.1 billion<\/a>, and is reportedly Sequoia\u2019s link to Elon Musk, though this is probably somewhat overstated. Musk and Sequoia\u2019s global managing director, Roelof Botha, are both native South Africans and have known each other for more than 25 years, dating back to their time together at the then-nascent PayPal, where Botha was recruited personally by Musk.<\/p>\n Despite that long relationship, the two haven\u2019t always seen eye to eye. Botha was highly critical of Musk\u2019s management style when Musk was CEO of the merged X.com\/PayPal company, where Botha was CFO. Botha once told<\/a> veteran journalist Ebbe Dommisse, \u201cI think it would have killed the company if Elon had stayed on as CEO for six more months. The mistakes Elon was making at the time were amplifying the risk of the business.\u201d But Musk was at odds with pretty much that entire crew at the time, and those tensions have long since been resolved<\/a>.<\/p>\n The bigger point here: when you\u2019re managing tens of billions of dollars in assets and your firm\u2019s reputation rests on backing winners like Google, Stripe, and Nvidia, you don\u2019t easily cast aside a rainmaker.<\/p>\n Meanwhile, Maguire\u2019s behavior suggests he\u2019s not backing down. After issuing a 30-minute video<\/a> on X last weekend in which he apologized for offending so many \u2014 saying he was making a point about a political ideology and not one about a religion \u2014 he has doubled down with increasingly aggressive posts this week. He claimed he has \u201creverse engineered\u201d his critics\u2019 \u201ccommand structure\u201d and threatened to \u201cembarrass\u201d anyone who escalates against him. He added that this is him at \u201c1% throttle\u201d and warned people not to \u201cfuck w children of the internet.\u201d<\/p>\n The silent treatment<\/strong><\/p>\n Sequoia has precedent for its approach to this situation. The firm has historically given its partners space to express themselves publicly, with figures like Doug Leone<\/a> and Michael Moritz<\/a> (who left the firm<\/a> in 2023) representing different political perspectives. <\/p>\n But there\u2019s a crucial difference between political diversity and incendiary rhetoric and clearly to some, Maguire\u2019s comments extend beyond partisan politics into territory that alienates both political opponents and potential business partners.<\/p>\n It\u2019s also worth remembering that even for Sequoia, there is a bright line. Michael Goguen, another, earlier rainmaker with the firm, was promptly shown the door<\/a> when Sequoia learned of a sexual abuse lawsuit filed against him. The situations are hardly comparable; Goguen\u2019s issues were legal and personal, not ideological. At the same time, Sequoia has shown it isn\u2019t willing to circle the wagons at any cost, not if its reputation is at stake.<\/p>\n Presumably, several factors inform Sequoia\u2019s do-nothing PR strategy, including how quickly people, faced with a constant flurry of news, move on from a scandal. The firm is also operating in a different political landscape right now in the U.S. Along with Donald Trump\u2019s victory and the rollback of DEI initiatives has come new tolerance for controversial speech. What might have been career-ending at an earlier point in time is now weathered more easily.<\/p>\n The firm is also likely banking on the fact that while founders want partners who fit the traditional, more genteel VC mold, they want successful ones even more. Startups being courted by multiple top-tier firms might not like or agree with Maguire, but when Sequoia comes calling with its track record and almost bottomless pockets, most founders are going to welcome the firm with open arms.<\/p>\n There\u2019s also the very real possibility that Sequoia is working on a contingency plan. (Sequoia declined to comment on Maguire\u2019s posts when reached by TechCrunch earlier this week.)<\/p>\n Still, Sequoia\u2019s silence carries risks. Not all the signers have been confirmed, but the petition against Maguire includes the names of some prominent Middle Eastern executives and founders who have attested to signing it, and they represent the kind of diverse, global talent pool that drives innovation. By not addressing the controversy, Sequoia risks being seen as tacitly endorsing Maguire\u2019s views.<\/p>\n Put another way, though the venture capital world has historically been remarkably forgiving of controversial figures<\/a> with exceptional deal flow, the firm is gambling with its reputation in an increasingly connected global market where alienating entire regions and communities carries real business consequences.<\/p>\n Whether that bet pays off will depend on how long the controversy lingers, how much business it actually costs Sequoia, and whether Maguire can resist the urge to push things past Sequoia\u2019s own tolerance threshold. (He has said he doesn\u2019t post anything that hasn\u2019t been \u201cexcrutiatingly thought out<\/a>.\u201d)<\/p>\n History suggests that established financial firms with strong track records tend to outlive their scandals, even serious ones. When Apollo Global Management\u2019s Leon Black resigned in 2021<\/a> over his $158 million payments to Jeffrey Epstein, the firm\u2019s stock barely moved and shareholders seemed largely unfazed. Apollo just continued its aggressive deal-making under new leadership.<\/p>\n Similarly, Kleiner Perkins survived Ellen Pao\u2019s high-profile gender discrimination<\/a> lawsuit in 2015. But it took years and essentially an entirely new team<\/a> for the storied venture firm to regain its footing in Silicon Valley\u2019s hierarchy. The lesson here may be that while controversial partners can be endured, the recovery timelines can vary significantly depending on how firms handle the crisis.<\/p>\n For now, the crisis communications professional, who asked not to be named, has some advice for Maguire and, by extension, Sequoia. Regarding the video Maguire published in the aftermath of his initial comments, the expert said, \u201cI did think that apology addressed the ambiguities in [Maguire\u2019s] post. But it\u2019s a 30-minute video \u2014 you have to be really interested to watch this.\u201d<\/p>\n If there\u2019s a next time, the professional said, Maguire should \u201cdo two videos \u2014 one for three minutes\u201d and another, longer video, for anyone who wants to keep watching. <\/p>\n Sometimes, the expert added, \u201cless is more.\u201d<\/p>\n<\/div>\n