Reinventing Venture Capital: Evergreen Funds and Listed Venture Firms

VC invests in innovation, change, and impact, yet its own operating model has seen little major innovation. In 2021, Sequoia began changing this by establishing an evergreen fund without a fixed life, allowing longer ownership of excellent companies rather than hurried disposals. Its investment history explains why. Sequoia invested in Apple in 1979. Apple listed on Nasdaq in December 1980, and Sequoia sold its stake for US$6 million after eighteen months, earning forty times its investment in a year and a half. Impressive as that was, it missed Apple’s extraordinary later growth. A fortyfold gain became one of its greatest investment mistakes. Reflecting on this, Sequoia emphasized long-term investment and greater patience with high-quality holdings. After selling Apple too soon, Sequoia extended patience. While other funds generally lasted under ten years, many Sequoia funds were extended to sixteen or seventeen. It invested US$12.5 million in Google in 1999. At the 2004 IPO price, returns exceeded two hundredfold, yet it held until 2006. With a good company’s shares, the later you sell, the more you earn. These experiences and changes inform my views on Taiwan’s transition toward evergreen VC and listed venture firms. Taiwanese funds commonly last seven to ten years, a model imported from Silicon Valley. As Taiwan VC reaches forty years, most still use that term. Near expiry, they stop new startup investments and actively liquidate holdings to return money before the fund ends. Experienced firms such as Sequoia and Top Taiwan Venture Capital Group have long recognized that listing often marks the start of rapid growth. Why accompany a startup through its hardest years, then rush to sell because the fund expires? Amazon listed in 1997 at around US$400 million and is now worth almost US$2 trillion. Many examples show that long-term participation in excellent companies can create greater shareholder returns. One challenge is differing tolerance for investment horizons. Some shareholders can wait indefinitely, some for over a decade, while others find seven or eight years too long. Evergreen VC therefore needs a reasonable exit mechanism: listing the venture firm lets individual shareholders exit in the public market when their philosophy, time horizon, or liquidity needs change. VC also often has minimum commitments, such as thirty or fifty million. Even wealthy retail investors may not access top firms such as Sequoia or a16z. Listed venture firms could offer investors another choice alongside Taiwanese and US stocks, fixed income, and real estate: an illustrative 1–3% allocation to frontier industry, digital innovation, high or deep technology, and advanced academic ventures. The seven-to-ten-year limit also directly shapes investments. Responsible exits require allowing time both to support companies and to dispose of holdings, limiting earlier-stage opportunities. Evergreen firms could allocate a portion to frontier and innovative investments, strengthening Taiwan’s ecosystem and supplying fresh capital. As Taiwan VC enters its fortieth year, I hope it keeps innovating with the times and helps entrepreneurs build firm foundations and pursue international opportunities.