Sequoia Capital said it will take strong action against wilful wrongdoing and fraud

• ByStartupStory     |    April 18, 2022

After several of its high-profile startups, including BharatPe, social commerce firm Trell, and Singapore-based business-to-business (B2B) e-commerce firm Zilingo, were investigated for alleged lapses in corporate governance and financial irregularities, Sequoia Capital said it will respond “strongly” to “wilful misconduct and fraud.”

On Sunday, Silicon Valley’s legendary VC company, known for being an early supporter of Internet titans like Google, Apple, and WhatsApp, said it would take “proactive efforts” to increase compliance across its portfolio companies. Sequoia said it would perform governance training for founders and top management, as well as guarantee that whistleblower procedures were followed.

“Some portfolio founders have recently been investigated for possible fraudulent operations or inadequate governance.” These accusations are quite upsetting. We’ve always pushed entrepreneurs to think long-term. We prioritize the long-term and discourage vanity metrics. Despite this, we come across certain counter-examples to our beliefs,” the venture capital firm wrote in a blog post.

“It makes us think about what we, along with other investors who have partnered in these companies, could have done to avoid such scenarios,” the post continued.

After its co-founder Ankiti Bose was suspended amid an investigation into the company’s financial statements, Sequoia Capital managing director Shailendra Singh resigned from the board of Zilingo, a Singapore-based B2B marketplace for fashion manufacturers.

Ashneer Grover, the cofounder of banking unicorn BharatPe, and his wife Madhuri Jain were fired in a public feud earlier this year for suspected misappropriation of funds. Trell, a Sequoia portfolio company, is also looking into allegations of misappropriation of funds by its co-founders.

In a blog post published on Sunday, the VC firm stated that if information is not disclosed with board members or if there is “wilful deceit and intent,” there is little a board member can do.

Follow Startup Story