<story><title>Sequoia gives away $21M investment in Finix as it walks away from deal</title><url>https://techcrunch.com/2020/03/09/sequoia-is-giving-away-21-million-to-a-payments-startup-it-funded-as-it-walks-away-from-deal/</url></story><parent_chain><item><author>eightysixfour</author><text>&amp;quot;it’s hard to understand why it felt compelled to give away $21 million — money that institutions like Stanford and hospitals give to Sequoia to invest on their behalf.&amp;quot;&lt;p&gt;Does not seem that hard to understand to me. They led the round, that means other investors are in on the deal as a result of Sequoia. If they had taken the money back, they would have lost the trust of other investors in future fundraising rounds that they lead and left the other investors in Finix in a bad spot with a lot of capital in a company that is now, presumably, $21m short of their needs.&lt;p&gt;$21m is nothing compared to the loss of trust in Sequoia that pulling the funding would have caused.</text></item></parent_chain><comment><author>duxup</author><text>Yeah this seems to be the case.&lt;p&gt;Nobody is going to want to invest with them if they&amp;#x27;re known to round everyone up and ... walk.&lt;p&gt;Presumably the value of being able to call up other investors and get their money, guidance, thoughts in the game too is highly valuable.&lt;p&gt;In business very often the network type stuff is the most valuable.   Give me $1B and someone with a good network $1B and we go out investing in startups or such ... dude with the network probabbly does pretty well compared to me.</text></comment>
<story><title>Sequoia gives away $21M investment in Finix as it walks away from deal</title><url>https://techcrunch.com/2020/03/09/sequoia-is-giving-away-21-million-to-a-payments-startup-it-funded-as-it-walks-away-from-deal/</url></story><parent_chain><item><author>eightysixfour</author><text>&amp;quot;it’s hard to understand why it felt compelled to give away $21 million — money that institutions like Stanford and hospitals give to Sequoia to invest on their behalf.&amp;quot;&lt;p&gt;Does not seem that hard to understand to me. They led the round, that means other investors are in on the deal as a result of Sequoia. If they had taken the money back, they would have lost the trust of other investors in future fundraising rounds that they lead and left the other investors in Finix in a bad spot with a lot of capital in a company that is now, presumably, $21m short of their needs.&lt;p&gt;$21m is nothing compared to the loss of trust in Sequoia that pulling the funding would have caused.</text></item></parent_chain><comment><author>wmichelin</author><text>Sure, but wouldn&amp;#x27;t it have made more financial sense for them to maintain some kind of position? Even if they gave up their board seat for the conflict of interest reasons, I would imagine that Sequoia has some kind of obligation to their investors to get some kind of return on that $21m.</text></comment>