This week, Sequoia Capital announced significant changes in a memo shared on X, which includes the closure of its London office and the discontinuation of its scout program. Observers caution against over-interpreting the London closure, noting that the city has a vibrant AI ecosystem. Conversely, the termination of the scout program reflects broader trends in the venture capital landscape.
Seventeen years ago, Sequoia introduced the scout model, enabling select founders and operators to invest on the firm’s behalf. This was quickly adopted by many other venture capital firms as competition for deals intensified. However, there seems to be a growing consensus that the model has reached its peak effectiveness.
Skepticism regarding the scout model existed even from its inception. VC Sheel Mohnot expressed his doubts this week on X, stating, “While they led the way with the scout program, I never found it compelling. The scouts often lack genuine investment interest, and there’s still room for misses, as seen with Uber. I think others may discontinue their programs as well.”
Sequoia did not explicitly criticize the scout model in its announcement, instead emphasizing a shift towards greater focus. Their vision of “channeling more effort into fewer projects” aligns with sentiments from others who have questioned the scattershot approach prevalent in scouting.
In contrast, competitor Andreessen Horowitz (a16z) has launched a global scout network aimed at identifying opportunities in both the U.S. and smaller European markets. Partner Gabriel Vasquez noted that their revamped program aims to focus intensely on “the best people.”
Under this renewed strategy, scouts will receive increased resources but will also be expected to be more engaged, including co-hosting events with the firm. “We’re allocating more budget, but decreasing the overall number of scouts,” Vasquez explained.
This shift suggests that venture capital firms are reevaluating the scout model. For founders, being a scout offers close ties to firms they may wish to partner with or receive funding from in the future, enhancing their reputation within the entrepreneurial community.
Some scouts are likely to be disappointed by the discontinuation of Sequoia’s program. Roxanne Varza, head of Station F, expressed her sadness about the news on LinkedIn and hoped that other funds would not follow suit.
Having been a Sequoia scout from 2020 to 2025, Varza commented to TechCrunch that she didn’t possess any information beyond the memo but acknowledged that the scout role often served as a pathway for aspiring investment leaders. “Numerous exceptional scouts have transitioned into roles where they manage or build funds, and these programs have been crucial in developing their investment track records and connections,” she stated.
Varza also asserted that the program’s influence extended beyond individual scouts, contributing positively to the overall investment ecosystem. “These initiatives have played a role in shaping the investment culture and early-stage funding landscape in Europe,” she noted.
While there may be agreement with Varza on the program’s contributions, its time may have passed for a couple of reasons. First, experienced operators might find more financial benefits as angel investors since they can retain the investment returns. Second, leading venture firms have gained sufficient stature that top founders are more likely to approach them directly, reducing the risk of missing crucial deals, especially in very early or niche markets.
Despite this evolution, the allure of early and specialized deals suggests that scout programs are more likely to be revamped rather than completely eliminated. “While Sequoia may be discontinuing their program, forms of venture partner-style investments are expected to continue,” Varza concluded in her email to TechCrunch. “Scouts were merely a method to expand that format. I doubt Sequoia will eliminate all types of venture partners, though they certainly can be unpredictable.”
