Like many of America’s buzziest commercial centers, Silicon Valley is mostly populated by people from away. Even those well-scrubbed Stanford University M.B.A. bros usually turn out to be corn-feed Iowans or some-such, nevermind the thousands of techies of Indian and Chinese descent trying to create the next new, new thing.
Michael Moritz isn’t to the Bay Area born, either. More precisely, the freethinking, former head of prominent venture firm Sequoia Capital is, in his own words, “100% an Ashkenazi Jew” from Wales. Talk about a category of one. It’s that otherness that has prompted Moritz to write a memoir, Ausländer (German for “outsider”), about his family, some escaping Nazi Germany to the United Kingdom, others being murdered, and him coming to terms with it.
But the book is even much more than that. It’s really a metaphorical, lifequest meditation by a terrifically smart guy who was also a professional writer.
Moritz is quite the character—parts polymath, Zelig, and “the most interesting man in the world” (like the guy in the Dos Equis commercial). The former Time magazine correspondent is a noted philanthropist (knighted by Queen Elizabeth), civic activist, hotelier, media publisher, painter, Oxford University and Wharton School of the University of Pennsylvania grad, the richest Welshman (sorry, Tom Jones), and, yes, a world-class investor. Moritz led Sequoia from 1995 to 2012, stepping down when he “slithered unconscious beneath the table” during a meeting and was diagnosed with a rare blood cancer, which he says, is now in remission—“touch wood.”
When Moritz was at Sequoia, he helped the firm invest in mega home runs like PayPal, Yahoo!, LinkedIn, and Google. He was on all of those companies’ boards, and currently is a director of Klarna Group and Formation Bio.
What does he think of the venture-capital business today?
“It’s become very difficult because there’s such an enormous amount of money flowing in, everybody from sovereign-wealth funds to individuals,” Moritz says. “Aspects of it resemble participating in an auction business. Returns come down.”
What does Moritz make of the artificial-intelligence revolution and the massive investments in data centers made by Big Tech?
“It’s extraordinary,” he says. “I don’t think anyone at the helm of these big companies ever thought that they were going to be operating a massively capital-intensive business. If everybody’s being honest, they have been caught by surprise by the enormous, unheralded acceleration by AI in all its various guises and aspects—whether it’s some of these private companies, the explosion of data centers that drain the power grid, fears about employment, and the impact of these new technologies on pretty much any field.”
Is this troublesome?
“Without a shadow of doubt, I think this will be like every preceding changing of the guard in technology, where two or three extraordinary companies emerge and there’ll be a lot of roadside casualties,” he says. “If capital dries up for some of the smaller companies, they’re not going to have many alternatives but to either fold themselves into something larger, or fall by the wayside.
“The other understandable aspect of this is the attention—much of it unflattering—on the concentration of wealth among a few [individuals] and the concentration of market cap in a handful of companies. I don’t know if there’s ever been such concentration before. And the private companies that have these extraordinary market caps nobody ever dreamed would occur. Obviously, that’s a source of great tension with politicians and the broader public.”
What about SpaceX and Elon Musk?
“Whatever varied opinions people have of him, it’s hard to think of an industrialist in America who has been as successful as Elon. He’s in a class of his own, and he has pretty stiff competition,” Moritz says.
As for the very high valuations of SpaceX and Tesla, Moritz offers some context. “There’s no precedent for the growth of some of these businesses,” he says. “Similar things were written about the valuations of Facebook or Google or Microsoft. I remember when Microsoft went public and everybody thought the $400 million or $500 million valuation for the company was ludicrous.”
His take on OpenAI’s Sam Altman? “I’m going to take the Fifth on that,” he says. “I think Ronan Farrow’s piece in the New Yorker was spot on.”
In Ausländer, Moritz has little sympathy for Big Tech CEOs and their fealty to President Donald Trump:
“For me, one of the sorriest sights of this administration was the spectacle of several leaders of large technology companies serving as a backdrop at the inauguration and, subsequently, responding to his every whistle. I know that most would have preferred to be elsewhere but were responding to an invitation that they couldn’t refuse lest Trump turn the power of the state on their companies.
“It is why they make frequent cameo appearances in the Oval Office where the revolving cast of characters reminds me of the improvised meetings Tony Soprano once convened on the sidewalk outside Satriale’s Pork Store. I’m sure they, despite their babysitting services, don’t think, unlike the heads of German companies almost 100 years ago, that they can keep this man, with all his brutish impulses, under their thumbs.”
Paradoxically, as Moritz’s excoriations of Trump lead him to comparisons with the rise of Hitler, Trump’s America also has led him to obtain German citizenship, as he feels discomfort in the United Kingdom and the U.S. (where he already holds passports) these days. “I think the lesson I’ve learned is that you can never have enough passports.”
Note, though, that Moritz is that rare public figure today who is speaking out publicly against both Trump and Democrats.
“Over the past 30 years, California has been a very hostile, inhospitable place for business and for wealthy successful individuals,” he says. “We have a state with one of the highest tax rates in the country. You have the highest unemployment figures in the country. You’ve got the most expensive housing in the country. You’ve got the highest homelessness rate in the country, and a shocking record in literacy and educational standards in the public school systems. The government of California has failed its citizenry in a frightful fashion.
“Many large corporations and wealthy individuals have turned tail and said, ‘Life’s too short to stay in California. We want to be in a place where we feel welcome.’ ”
Moritz, though, is making a stand in San Francisco, where he has lived since 1981. “I’m deeply involved in trying to help San Francisco get onto a better footing in several ways,” he says. “My wife and I have a family foundation called Crankstart with about 60% of its grants going to the San Francisco Bay Area.” In the foundation’s latest annual filing, it reported disbursing $205 million and having $4.4 billion in assets.
“I started the San Francisco Standard with a gentleman called Griffin Gaffney, which I’m pretty involved with. You can’t have a thriving city without a high-quality local media business,” he says. Moritz says the site’s editorial slant is “right of centrist,” reflecting his own politics, but says the reporters are “completely free-range.” And he says, “I’m a big fan of [San Francisco] Mayor Daniel Lurie, and I’m trying to help him as much as I can.”
“Unlike so many others, you have chosen fight instead of flight,” I say to Moritz. “Yeah, but I’m going to be 72 fairly soon,” he says, “and I’m not sure if I enjoyed similar material circumstances and I was 30 years younger that I’d stay.”
Moritz has plenty of other pursuits besides trying to save California, like working on Borgo Pigano, a “countryside hotel” in Tuscany, as well as a city hotel in Florence that he and his wife, Harriet, own. He also paints, which he took up later in life (just like Donald Regan and George W. Bush, he points out) after reading Winston Churchill’s essay “Painting as a Pastime.” He occasionally writes opinion pieces for the Financial Times and is working on his second book with Alex Ferguson, the legendary manager of the soccer powerhouse Manchester United.
Moritz’s own investing is done mostly through HRTG, renamed from Sequoia Heritage, which was founded in 2010 to manage the wealth of Sequoia partners and others. HRTG has $27 billion of assets in a “concentrated portfolio of mostly private, non-venture-like companies often in mature, unglamorous, industrial businesses for long-term compounding,” he says.
I was curious about Moritz’s earlier career at Time Inc. (I worked there for 29 years), where he co-wrote a book about Lee Iacocca in his heyday, and another about Apple and Steve Jobs, The Little Kingdom: The Private Story of Apple Computer, the latter indirectly propelling him into the venture business.
Moritz was assigned to write a story about Jobs as part of Time’s Man of the Year (as it was called then) feature for 1982, which turned out to be the PC, as Machine of the Year. That greatly irked Jobs, who thought he’d been selected. To make matters worse, Moritz says his piece was turned into an “unfair, unflattering, salacious, gossipy story about Steve,” which made Jobs even angrier and Moritz “similarly upset and let down by the magazine.” He quit Time, wrote a newsletter for a bit, and then “went to talk to some leaders of VC firms,” and was offered a job in 1985 by Sequoia founder and legendary VC Don Valentine, a key early investor, ironically enough, in Apple.
“I think once you’re a journalist, you’re always a journalist, which is why I pick up the pen now and then,” he tells me. “Journalism taught me a lot about being a venture investor. As a journalist, you drop into a story about which you know nothing. You’ve got to quickly collect your wits and talk to as many people as possible. You try to assemble the narrative, knowing you have imperfect information and that people are trying to pull the wool over your eyes. There are many comparisons with that and with trying to figure out whether to make a venture investment.”
So, could any old journalist do what Moritz did? I’m pretty sure that’s a category of one.
Write to Andy Serwer at andy.serwer@barrons.com. Follow him on X and subscribe to his At Barron’s podcast.