Sequoia shutting down its Scouts program marks the end of an era

Sequoia this week announced a wide overhaul successful a memo posted to X, a determination that includes closing its London bureau and shutting down its scout program. Observers warn that it would beryllium a mistake to work excessively overmuch into the London closure, since the British superior has a thriving AI scene. On the different hand, the determination to extremity scouts says much astir wherever task investing is headed.

That’s partially due to the fact that 17 years ago, Sequoia pioneered the scouts model, successful which prime founders and operators constitute checks connected the firm’s behalf. Amid accrued contention for woody flow, galore VC firms followed suit. But a statement present seems to beryllium emerging that the exemplary has reached its limits successful its existent form.

Not everyone was sold connected the exemplary successful the archetypal place. “They pioneered the scout programme but [to beryllium honest] it ne'er made consciousness to me!” VC Sheel Mohnot wrote connected X this week. “The scouts themselves don’t truly attraction that overmuch astir the investments, you tin inactive miss (like they did with Uber), not definite what it gets you. I fishy different firms volition shutter theirs too.” helium added.

To beryllium clear, Sequoia didn’t marque a lawsuit against scouts successful the memo. Instead, it framed its determination arsenic portion of a broader request for much focus. But its extremity of “putting much vigor down less radical and things” is apt to resonate with others who’ve questioned the ‘spray and pray’ attack to scouting.

Rival steadfast Andreessen Horowitz (a16z), for instance, rolled retired a global scout network aimed astatine spotting opportunities successful the U.S., but besides successful smaller European hubs. But a16z spouse Gabriel Vasquez told TechCrunch earlier this twelvemonth that the steadfast had revamped its programme to treble down “on the champion people.”

Under this caller approach, Vasquez explained, scouts get much resources but are besides expected to beryllium much active, specified arsenic by co-hosting dinners with the firm. “They get much budget, but we person reduced the number,” helium said.

This besides seems to bespeak that it is VC firms who person been driving an overhaul of the model. For founders, being a scout is attractive: it brings them person to firms they whitethorn privation checks from someday, oregon adjacent a spouse relation with, and being seen arsenic idiosyncratic who tin constitute a cheque tin rise their lasting among different founders.

Some scouts volition undoubtedly mourn the extremity of Sequoia’s program. Among them is Station F brag Roxanne Varza, who wrote connected LinkedIn that she was “sad” to perceive that the programme was getting chopped off, and “hope[d] that different funds [w]on’t travel suit.”

Varza, a erstwhile Sequoia scout from 2020 to 2025, told TechCrunch that she had nary accusation beyond what had been shared publicly, but observed that becoming a scout had often been a stepping chromatic for aspiring concern managers.

“I cannot sanction each of the unthinkable scouts that person gone connected to articulation oregon physique funds, but determination are rather a few. And the scout programs whitethorn person helped them get determination — allowed them to physique an concern way record, allowed them to physique relationships with assorted funds directly, and more,” she wrote to TechCrunch. 

According to Varza, the program’s interaction went beyond the idiosyncratic level, alternatively helping the full ecosystem go much mature. “I judge they person helped to foster the concern civilization and early-stage concern scenery that we present spot successful Europe, for example,” Varza said.

While others whitethorn hold with Varza astir the relation these programs person played, they whitethorn inactive person tally their people for 2 reasons. First, seasoned operators whitethorn get much fiscal upside arsenic angels. When it’s their ain money, they get to support the returns, too. Second, starring VC firms are present large and well-known capable that the champion founders thin to travel to them, truthful they interest little astir missing deals, but astatine the precise earliest stages oregon successful niches and geographies wherever they person little reach.

Still, the propulsion of those aboriginal and niche deals is wherefore scouts programs are overmuch much apt to get revamped than to vanish entirely. “While Sequoia whitethorn beryllium cutting the program, task partner-style deals are apt to continue,” said Varza successful her email to TechCrunch. “Scouts was conscionable a mode to standard the format. I don’t ideate Sequoia would extremity each forms of task partners, but they are afloat of surprises.”