Sequoia partners reportedly blindsided when Roelof Botha joined SpaceX board

Sequoia Capital’s partners were caught off guard when Roelof Botha, the firm’s former steward, disclosed that he had joined the board of SpaceX, according to a Financial Times report. The report ties the surprise to a wider rift between Botha and the venture firm he led until stepping down last year. The new board seat could complicate Sequoia’s ability to trade its $20 billion stake in SpaceX, the FT reported.

Citing an unnamed source, the FT said Botha did not go through Sequoia’s compliance process or secure approval from the partnership before taking the SpaceX role. Botha and SpaceX CEO Elon Musk previously worked together at PayPal. Sequoia’s partners learned of the board appointment only when it was announced, the report said.

The disclosure comes in the same week Sequoia announced several major changes: closing its London office, combining its early-stage and growth teams, and ending its Scouts program. According to the FT, those moves are being characterized as an effort to reverse the influence of Botha’s tenure. One unnamed source told the paper that Botha favored process and hierarchy, while the rest of the team did not.

Not everyone at the firm supports the restructuring. Another source pushed back on the characterization, telling the FT that the changes amount to an erasure of Sequoia’s heritage rather than of Botha’s legacy. The report describes the break between Botha and Sequoia as having widened since the SpaceX announcement this summer.

A Sequoia spokesperson said the firm continues to work closely with Botha, according to the report. The firm has not publicly detailed the reasons behind this week’s organizational changes. The FT’s account relies on unnamed sources and did not include comment from Botha or SpaceX.

For Sequoia, whose portfolio spans major US technology companies, the dispute draws attention to how the firm manages conflicts involving partners’ outside board roles. The $20 billion SpaceX stake is among its largest positions, and any restriction on trading it would carry weight for the firm’s limited partners. Sequoia and SpaceX did not provide further public statements on the matter.

More company and startup news from TechManNews.