Sequoia is always ahead of the curve. This is good for entrepreneurs. Entrepreneurs are told well in advance about money coming from Sequoia. Even that article mentions that fact.
They have always been an early stage investor. They invested in Apple when it was run by two scruffy kids and nobody believed their "personal computer" story. Even the ones who believed were scared of IBM crushing them. They believed Yahoo guys and their Internet story when it was still part time project for PhD students. They believed in YouTube even though there were bigger players in video sharing market. They invested in YC company (sama's company) when people were mocking YC as place where "feature based" companies are crated to be acquired. They invested in YC itself when YC didn't have hits like Dropbox, AirBnB or Heroku. They never invested later stage at pricy valuations like some of the recent funds. Be it that "hot" startup that comes around the corner like Netscape, Facebook, Twitter, Tumblr and number of other dot com companies.
VC's are figuring out how to combat things like YC and number of micro funds. And here you have Sequoia, who is quietly doing things without any ruckus. That too for last 3 years. They saw the threat of incubators/micro funds before anyone else. And they acted upon it before anyone else.
PS. I don't work for Sequoia. Nor I'm their "scout"
FYI, Sequoia investing is not at all an example of both the points you've mentioned.
Sequoia doesn't choose duds as their scouts. These are all experienced entrepreneurs who have "done things" (like YC choosing its alums as partners). And Sequoia is not investing in millions. They hare investing in thousands. Their returns on Instagram alone can take care of this program for years to come. They are helping budding, young first time entrepreneurs to get started. They are creating network of budding entrepreneurs and budding angels. Many companies may fail but you have hardened entrepreneur out of this program.
Its going for last 3 years. Meaning it started in 2009 when we were in deep recession. Money has been floating around valley forever. When general public (via IPOs) buy into frenzy then we can call it a bubble. How this program is different from Andreesen Horowitz seed investments?
They have always been an early stage investor. They invested in Apple when it was run by two scruffy kids and nobody believed their "personal computer" story. Even the ones who believed were scared of IBM crushing them. They believed Yahoo guys and their Internet story when it was still part time project for PhD students. They believed in YouTube even though there were bigger players in video sharing market. They invested in YC company (sama's company) when people were mocking YC as place where "feature based" companies are crated to be acquired. They invested in YC itself when YC didn't have hits like Dropbox, AirBnB or Heroku. They never invested later stage at pricy valuations like some of the recent funds. Be it that "hot" startup that comes around the corner like Netscape, Facebook, Twitter, Tumblr and number of other dot com companies.
VC's are figuring out how to combat things like YC and number of micro funds. And here you have Sequoia, who is quietly doing things without any ruckus. That too for last 3 years. They saw the threat of incubators/micro funds before anyone else. And they acted upon it before anyone else.
PS. I don't work for Sequoia. Nor I'm their "scout"