Sequoia permanent capital

Still deciding how I feel about this. On the one hand, it's good for LPs who no longer are beholden to a typical fund structure and can access liquidity more easily without having to resort to the secondary market. Many VC funds have been extending much longer than 10 years since portfolios take longer to wind down as companies stay private longer or LPs have been handed shares in private companies when funds dissolve at the end of their lives - neither good for liquidity. I don't know what kind of transfer restrictions Sequoia places on LP interests but I'd imagine they're pretty significant, so selling a Sequoia secondary interest might be tricky and force you to take a significant discount (even though it's high-quality stuff). 

On the other hand, there will clearly be an added layer of fees here, making this more expensive for LPs. It also means that LPs aren't even aligned with each other anymore. Large endowments and foundations have an investment time horizon of forever (minus the 5% they must spend every year) and are probably okay with an evergreen structure and never really getting liquidity. LPs who need more regular distributions (FoF managing closed-end pools of money, pension plans, etc.) might wonder if they're getting the short end of the stick.

Pitchbook made a good point this weekend about the possibility for GP/LP misalignment in this new structure:

The bigger issue is that in this structure, the interests of LPs and GPs could be misaligned if the individual funds feeding the main vehicle aren't under the same pressure to perform well. Traditionally, if a fund isn't successful, there is also a downside for the GP. Under the model put forward by Sequoia, an underperforming sub-fund could be allowed to limp on, supported by sibling funds and generating fees for the manager, but not necessarily generating good returns for the LPs. There is a case to be made that this model will have less accountability. (https://pitchbook.com/news/articles/sequoia-fund-restructuring-VC-fundr…)

At the end of the day, I think I probably don't love it but it's Sequoia and their returns are apparently fantastic so also at the end of the day they get to do whatever they want and their LPs will stick by them as long as performance stays solid.