Mercor's Foody accuses Sequoia of dual-pricing valuation tricks
Original: Mercor’s Brendan Foody calls out Sequoia, accusing it of ‘dual-pricing’ valuation tricks
Why This Matters
Highlights controversial VC valuation practices that may mislead employees and markets
Mercor co-founder Brendan Foody publicly accused Sequoia Capital on X of using dual-pricing tactics, claiming the VC firm invests in rounds at two different valuations while promoting only the higher figure. Sequoia's Shaun Maguire responded, acknowledging the practice occurs but defending it as legitimate decoupling of investment and partnership relationships.
Brendan Foody, co-founder of AI talent platform Mercor (valued at $10 billion), called out Sequoia Capital for alleged dual-pricing practices on X. He claimed to have seen multiple rounds where Sequoia invests in two tranches at different valuations while only publicizing the higher figure. This practice involves lead VCs investing most capital at lower preferential valuations while putting smaller amounts at dramatically higher prices. Examples include Serval's $75M Series B announced at $1B valuation, though earlier Series A extension valued the company under $400M. Similarly, Aaru was backed by Redpoint at $450M despite $1B headline valuation. Sequoia partner Shaun Maguire responded, acknowledging this happened approximately five times in seven years but defending it as legitimate decoupling of partnership from capital when other investors pay above Sequoia's preferred multiples.