Pat Grady is a longtime growth investor at Sequoia. We cover what he's learned from Sequoia's legendary partners, how to become a great business writer, and his criteria for separating truly legendary companies from the rest.
Principles & Lessons:
1) Cultivate a culture of stewardship through accountability. Pat emphasizes that Sequoia’s ethos originates with Don Valentine handing over the partnership “without asking for any money,” which instilled a sense of guardianship in everyone. Pat quotes how, after that first transition, “we feel like we’ve been given this wonderful gift… the only thing asked of us is to leave it in a better place,” which drives internal performance pressure. This dynamic means no one is “safe” from being voted off, including top leadership, as demonstrated when a senior partner “changed the legal docs” so he himself could be removed if necessary.
2) Structure your own effort using concrete goals and OKRs. While describing his personal method, Pat says he “erect[s] scaffolding around” himself in the form of personal long-term plans that cascade into “annual OKRs, which cascade into quarterly OKRs, which cascade… day to day.” This ensures unwavering forward motion. He points out that it’s easy for intangible tasks to slip, so methodically breaking them down into weekly or daily lines of effort holds him accountable and sustains his drive.
3) Flatten hierarchy to preserve honest debate and high standards. Pat references how Sequoia structures its processes so “influence is a function of expertise, not a function of tenure.” He cites anonymous internal votes on deals—“the order of operations is that people who’ve been around forever speak last, so they don’t sway the conversation.” Pat adds that the simplest remedy against complacency is to eliminate untouchable status. As he says, “As soon as you’re safe, you become complacent,” which eventually erodes performance.
4) Obsess over deep clarity rather than superficial perfection. When investigating an opportunity or an individual, Pat says the goal is “not perfection but clarity.” He recounts the Snowflake follow-on investment: the surface metrics appeared “behind the plan” but, upon deeper questioning, he found “all good reasons” that actually reinforced the investment case. He says the best founders’ or companies’ stories do not require them to be flawless—only internally consistent, deeply understood, and explainable.
5) Understanding people is as vital as assessing markets. Discussing due diligence, Pat notes that a “market is the system-level dynamic, but people ultimately determine how big the company will get.” He underscores the brute force approach of references and personal chats to decode “the magnitude and direction” of an individual. He states, “I want to understand who they are in all the ways that don’t show up on LinkedIn,” describing walks to learn about a founder’s childhood or biggest mistake to see their real motivations.
6) A simpler, direct style of negotiation and communication fosters trust. Pat references Doug Leone’s approach: he “was unbelievably transparent,” letting the other side know their price and meeting in the middle swiftly. This style, Pat recounts, gave founders a sense that Sequoia was not playing hidden games but rather “just meeting them in the middle.” Pat calls that “the simpler you can keep things, the more straightforward you can be... the more people trust you.”
7) Smallness can be a weapon in investment strategy. Pat cites his wife Sarah’s new firm, Conviction, which focuses on early-stage AI. She embraces small fund size, tight portfolios, and high-quality, specialized pursuit of AI companies. He calls it “optimizing for quality over growth,” repeating that “any founder anywhere is likely to think of her if they are building an early-stage AI product” because she built a distinct brand. He frames it as an alternative to scaling up “270 investors,” which might dilute the deep expertise needed to spot outliers.
8) “Relentless application of force” distinguishes iconic companies. Pat recounts founder stories, referencing how “Max Rhodes of Faire told us that phrase came from Michael Moritz.” The best founders do not simply coast on a big idea; they push incessantly, ignoring personal comfort. Pat calls it “this zone, where the only thing you see is the mission,” and personal discomfort or ego “just doesn’t register.” That consistent, mission-first drive, anchored by a deep rationale for building, creates a potent edge that leads to “legendary” scale.
Transcript