Sequoia's scout era ends, and VC is watching

For founders and operators who spent years writing checks on Sequoia's behalf, the memo landed like a door closing. According to TechCrunch, Sequoia announced a broad overhaul in a memo posted to X during the week of November 6, 2026 — one that includes closing its London office and ending the scout program the firm pioneered 17 years ago. The London closure drew its share of second-guessing, but the more consequential decision may be the other one.

TechCrunch reported that observers caution against reading too much into the London exit, since the British capital has a thriving AI scene. The scout decision, by contrast, says more about where venture investing is headed, per the outlet's reporting.

What the memo actually said

Sequoia did not use the memo to argue against scouts as a concept. According to TechCrunch, the firm framed the decision as part of a broader need for more focus, rather than as a verdict on the model itself.

The firm's stated goal — "putting more energy behind fewer people and things" — is likely to resonate with others who have questioned what the source describes as the 'spray and pray' approach to scouting. That framing puts the emphasis on concentration over breadth, not on any claim that scouts failed at their jobs.

The distinction matters for anyone trying to parse the announcement. A firm closing an office is a geographic decision; a firm ending a program it invented is a statement about how it wants to source deals. Sequoia has made the second kind of statement while insisting, in the source's account, that it is really about focus.

Seventeen years of a borrowed idea

Sequoia pioneered the scouts model 17 years ago, per TechCrunch. In the arrangement the firm popularized, select founders and operators write checks on the firm's behalf. Amid increased competition for deal flow, many VC firms followed suit.

That history is why the shutdown lands differently than a typical program cut. The model Sequoia is retiring is one it introduced, and one competitors copied. TechCrunch reported that a consensus now seems to be emerging that the model has reached its limits in its current form — a softer claim than saying the idea was wrong from the start.

The skeptic who never bought in

Not everyone was sold on scouting in the first place, and at least one investor said so publicly this week. VC Sheel Mohnot wrote on X that the program had never made sense to him.

"They pioneered the scout program but [to be honest] it never made sense to me!"

— Sheel Mohnot, VC, in a post on X

Mohnot's post continued: "The scouts themselves don't really care that much about the investments, you can still miss (like they did with Uber), not sure what it gets you. I suspect other firms will shutter theirs too."

The Uber reference is his own example, offered in the post as an illustration that a wide scouting network does not prevent a firm from missing a major company.

How a16z already rebuilt its version

Sequoia's rival Andreessen Horowitz (a16z) rolled out a global scout network aimed at spotting opportunities in the U.S. and in smaller European hubs, according to TechCrunch. But the firm has since revamped that program.

a16z partner Gabriel Vasquez told TechCrunch earlier this year that the firm had reworked the effort to double down "on the best people." Under the new approach, Vasquez explained, scouts receive more resources but are also expected to be more active — for instance, by co-hosting dinners with the firm.

"They get more budget, but we have reduced the number."

— Gabriel Vasquez, partner at Andreessen Horowitz

That arrangement is a revision rather than a removal, and it is the closest thing in the source to a template for what comes after the wide-network version of scouting.

Why founders said yes to the badge

The source notes that being a scout is attractive for founders. It brings them closer to firms they may want checks from someday, or even a partner role with. And being seen as someone who can write a check can raise their standing among other founders.

Those are reputational and relational benefits rather than financial ones, and they help explain why the end of a program draws an emotional response from people who participated in it — not just from the firm that ran it.

Varza: 'sad' to see it cut

One of those participants is Station F boss Roxanne Varza, who wrote on LinkedIn that she was "sad" to hear the program was getting cut off, and "hope[d] that other funds [w]on't follow suit."

Varza, a former Sequoia scout from 2020 to 2025, told TechCrunch she had no information beyond what has been shared publicly. She observed that becoming a scout had often been a stepping stone for aspiring investment managers.

"I cannot name all of the incredible scouts that have gone on to join or build funds, but there are quite a few. And the scout programs may have helped them get there — allowed them to build an investment track record, allowed them to build relationships with various funds directly, and more."

— Roxanne Varza, former Sequoia scout (2020 to 2025), in an email to TechCrunch

Varza argued the program's impact went beyond individuals, helping the wider ecosystem mature. "I believe they have helped to foster the investment culture and early-stage investment landscape that we now see in Europe, for example," she said.

Two reasons the model lost its pull

TechCrunch lays out two reasons the programs may have run their course, even among people who agree with Varza about their past value.

• Seasoned operators may get more financial upside as angels — when it's their own money, they keep the returns too.
• Leading VC firms are now big and well-known enough that the best founders tend to come to them, so the firms worry less about missing deals, except at the very earliest stages or in niches and geographies where they have less reach.

Those two forces point in the same direction: the calculus that made a wide scouting network useful has shifted, at least for firms with Sequoia's profile.

Revamp, not extinction

The pull of those early and niche deals is why scout programs are much more likely to get revamped than to disappear entirely, according to the source. Varza made the same point in her email to TechCrunch.

"While Sequoia may be cutting the program, venture partner-style deals are likely to continue. Scouts was just a way to scale the format. I don't imagine Sequoia would end all forms of venture partners, but they are full of surprises."

— Roxanne Varza, in her email to TechCrunch

That leaves open the possibility that the format survives at Sequoia in some other shape, even as the specific program that carried its name comes to an end.

What this means for founders and funds

For founders who saw a scout role as a route toward a venture career, Varza's account suggests the loss is real but partial: the track record and relationships scouts built do not disappear with the program that helped create them. What changes is the institutional path — fewer structured slots at the biggest firms, and more pressure to build a record as an independent angel if the financial upside is the goal.

For the firms themselves, the move points toward concentration. If a16z's revamp is any guide, the direction is fewer scouts with more budget and more expected activity, rather than a broad, loosely managed network. That suggests the next version of the model will be judged on how engaged each participant is, not how many there are.

For the wider startup ecosystem, the open question is whether other funds follow Sequoia out. Mohnot predicted that they will; Varza said she hopes they won't. Which of them turns out to be right may say as much about the economics of venture sourcing as the memo itself did.