Sequoia this week announced a broad overhaul in a memo posted to X, a move that includes closing its London office and shutting down its scout program. Observers warn that it would be a mistake to read too much into the London closure, since the British capital has a thriving AI scene. On the other hand, the decision to end scouts says more about where venture investing is headed.
That’s partly because 17 years ago, Sequoia pioneered the scouts model, in which select founders and operators write checks on the firm’s behalf. Amid increased competition for deal flow, many VC firms followed suit. But a consensus now seems to be emerging that the model has reached its limits in its current form.
Not everyone was sold on the model in the first place. “They pioneered the scout program but [to be honest] it never made sense to me!” VC Sheel Mohnot wrote on X this week. “The scouts themselves don’t really care that much about the investments, you can still miss (like they did with Uber), not sure what it gets you. I suspect other firms will shutter theirs too.” he added.
To be clear, Sequoia didn’t make a case against scouts in the memo. Instead, it framed its decision as part of a broader need for more focus. But its goal of “putting more energy behind fewer people and things” is likely to resonate with others who’ve questioned the ‘spray and pray’ approach to scouting.
Rival firm Andreessen Horowitz (a16z), for instance, rolled out a global scout network aimed at spotting opportunities in the U.S. and also in smaller European hubs. But a16z partner Gabriel Vasquez told TechCrunch earlier this year that the firm had revamped its program to double down “on the best people.”
Under this new approach, Vasquez explained, scouts get more resources but are also expected to be more active, such as by co-hosting dinners with the firm. “They get more budget, but we have reduced the number,” he said.
This also seems to indicate that it is VC firms that have been driving an overhaul of the model. For founders, being a scout is attractive: it brings them closer to firms they may want checks from someday, or even a partner role with, and being seen as someone who can write a check can raise their standing among other founders.
Some scouts will undoubtedly mourn the end of Sequoia’s program. Among them is Station F boss Roxanne Varza, who wrote on LinkedIn that she was “sad” to hear that the program was getting cut off, and “hope[d] that other funds [w]on’t follow suit.”
Varza, a former Sequoia scout from 2020 to 2025, told TechCrunch that she had no information beyond what has been shared publicly, but observed that becoming a scout had often been a stepping stone for aspiring investment managers.
“I cannot name all of the incredible scouts that have gone on to join or build funds, but there are quite a few. And the scout programs may have helped them get there — allowed them to build an investment track record, allowed them to build relationships with various funds directly, and more,” she wrote to TechCrunch.
According to Varza, the program’s impact went beyond the individual level, instead helping the entire ecosystem become more mature. “I believe they have helped to foster the investment culture and early-stage investment landscape that we now see in Europe, for example,” Varza said.
While others may agree with Varza about the role these programs have played, they may still have run their course for two reasons. First, seasoned operators may get more financial upside as angels. When it’s their own money, they get to keep the returns, too. Second, leading VC firms are now big and well-known enough that the best founders tend to come to them, so they worry less about missing deals, except at the very earliest stages or in niches and geographies where they have less reach.
Still, the pull of those early and niche deals is why scouts programs are much more likely to get revamped than to disappear entirely. “While Sequoia may be cutting the program, venture partner-style deals are likely to continue,” said Varza in her email to TechCrunch. “Scouts was just a way to scale the format. I don’t imagine Sequoia would end all forms of venture partners, but they are full of surprises.”
Source: techcrunch.com
