Sequoia’s Alfred Lin on the art and mathematics of the outdoors

Less than five minutes after sitting down, he and I are talking about exploring conflicting ideas at the same time. It’s a condition F. Scott Fitzgerald famously wrote about in 1936: “The test of the first intelligence is the ability to hold two opposing thoughts in the mind at the same time, and still be able to function.”

And Lin, who recently celebrated his 14th year at Sequoia Capital, thinks there are practical reasons to think big.

“The thing about handling things in conflict, in serious conflict, is that the real answer is somewhere in the middle,” Lin said. “Even if it leans one way or the other, whatever you’re trying to do, your answer is probably somewhere in the middle. But if you start in the middle and shine from there, you think ‘oh, this is obvious, it makes sense.’ Then limit the number of answers you look at. If you focus on the extremes and work towards the middle, you will pass almost every opportunity. That’s why when people are busy, they often come up with other options.”

Lin holds a unique distinction in Silicon Valley. He is one of the top investors at one of technology’s most storied VC firms. Sequoia has been a leading investor in DoorDash, Airbnb, Citadel Securities, and Reddit. The last time Lin talked to him a lot Fortune it was 2021, when both DoorDash and Airbnb went public within a few days of each other. Another point of contention in the controversy—Lin also led Sequoia’s investment in FTX, the collapse of which sent shockwaves through crypto and tech. (Lin said last year that the firm was misguided.) Even so, Lin continues to be considered the best of the best, a remarkable distinction in the long-term business.

Sitting across from Lin, in Sequoia’s San Francisco location above the chocolate factory, he sounds like the math he almost is. Lin TA-ed statistics courses in undergrad and grad school, and found that the more advanced the math, the more stressed it was. Lin may have dropped out of his Stanford Ph.D. to join LinkExchange (which sold to Microsoft for $ 265 million in 1998) but in his own way, he still does some training: Last week, at Sequoia’s pre-seed and seed production company Arc, he taught a session for outsiders.

What is an outlier? Can you tell when you meet one? Lin sees the discovery of founders as an experiment both mathematical and human, broad and deeply personal.

“The wrong way to think about math is that it’s just numbers or that it’s just ordinary,” he said. “But when you study mathematics, it has to do with patterns, to see an understanding that no one has seen before… And I try to see that in people. We often talk about outliers. In statistical terms, the outlier is four standard deviations from the mean, and it can be in a positive or negative direction. Both are exotic… But there is also a difference between unusual and exotic. Is this a true sign versus noise? If someone’s spike is very competitive in weightlifting, is that a real output? You have to distinguish that. I try to figure out why someone is different. I think most startups want to talk about how they are like all the other startups. “

Part of the key seems to be that someone’s personality, whatever it may be, is somehow well suited to the problem they want to solve. Lin knows very well that this is not easy to publish.

“It’s hard to define what an outlier is,” he said. “But the person has to have a spike, and that spike has to be on a path that makes sense to the market they want to go after.”

Lin seems wary of underestimating people, as a general rule, and he’s well-versed in the lines between the past and the present. The way I see it, he works with a mathematical system, and then uses that system as a jumping off point into the stories of self-starters and businesses. (Again, two different ideas at the same time.) So, Lin has the filters—and he gets away with it.

“In the seed, we are looking for three things,” he said Fortune. “We are looking for an external team, a real and compelling experience, and good market dynamics.”

There are also common characteristics that startup-ready outsourcers may have, he says. These range from flexibility to work ethic to the ability to attract followers. Lin is a believer in “founder-market fit,” the idea that there should be a fit between the founder and the market opportunity they are pursuing. He likes the vision, the reality, and wants to see how that vision is connected to that and implemented on—but Lin believes that starting a company is a team sport.

“I don’t think everyone can do all three, but if you assemble the first team, they can do all three,” said Lin. “If you look at Airbnb, today, it looks like Brian Chesky. But let’s not forget that Brian will tell everyone that it was Joe’s idea. It wasn’t his idea so without Joe it wouldn’t have happened. And without Nate, this technology would never have been built.”

Lin is very open, but reluctant to be prescriptive. It’s one of the last arguments to handle the controversy. Both want to help potential founders, but don’t want to give them (or me) too much information, so as not to encourage imitation. When I asked Lin what his best first meeting with the founder was like, he smiled but didn’t give me a straight answer.

“If I tell you and you put it out there, and everyone tries to be that,” Lin said, “my approach falls flat on its face.”

Elsewhere…Fortune’s Most Powerful Women Asia list has just been released, and my colleague Nicholas Gordon interviewed Singaporean VC Jenny Lee, an investor in Alibaba, Didi, and Xiaomi. Here’s what he had to say about strategy, geopolitics, and more.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Sign up for the Term Sheet newsletter here.

Nina Ajemian saved the deals section of today’s newspaper.

VENTURE DEALS

– Q-CTRLSydney-based quantum infrastructure software developer, raised $59 million in Series B-2 funding. GP Bullhound led the round and joined Alpha Edison, Lockheed Martin Ventures, NTT Financethere are investors Alumni Ventures, Salesforce Ventures, John Ealesand others.

– Goal GreenBerlin-based decarbonization solutions provider for the construction sector, has raised $15 million in seed funding. Fifth Wall led the round and joined Atlantic Labs and Speedinvest.

– LithosBoston-based electrochemical lithium extraction technology developer, raised $10 million in seed funding. Clean Energy Ventures led the round and joined History of TechEnergy Ventures, GS Futures, Lowercarbon Capitaland MassCEC.

– Building RadarMunich-based workflow automation software platform for the construction industry, raised $7.2 million in funding. Capital Partners led the round and joined with the present traders.

– LayerZurich-based full-stack decentralized tools developer, raised $6 million in seed funding. 1x led the round and joined Fabric Ventures, Arrington Capital, Stake Capital Group, IOBCand angel investors.

– Loot LabsSeattle-based digital collectibles platform developer, raised $6 million in seed funding. BITKRAFT Ventures led the round and joined Sfermion, Fabric Venturesand Everyrealm.

– QuarterStockholm-based qualitative public market research software and data provider for financial and investor relations professionals, has raised $6 million in funding since. Altos Ventures.

– RevyzeParis-based social learning app project GenZ and GenAlpha, raised $6 million in seed funding. Speedinvest and Moonfire led the round and joined Motier Ventures, Station F, Illka ​​Paananenand others.

PRIVATE EQUITY

– Butterfly Equity agreed to find The Duckhorn Portfolioa Saint Helena, Calif.-based luxury wine company valued at $2 billion.

– GSE Worldwidebacked by a loan arm of BC Partnershe found Net Results MarketingChevy Chase, Md.-based sports, culinary, and entertainment marketing company. Financial conditions were not disclosed.

– Oakley Capital he got a big part in Assured Data ProtectionLeeds, England-based data backup, business continuity, disaster recovery, and threat monitoring service provider. Financial conditions were not disclosed.

– Renovus Capital Partners he got a big part in Angeion GroupPhiladelphia-based classroom event management solutions provider. Financial conditions were not disclosed.

– VSS Capital Partners he got a big part in Tray PartnersSan Francisco-based procurement value creation, strategic sourcing, and implementation management consulting services management consulting firm for private-sponsored clients. Financial conditions were not disclosed.

EXITS

– Blue Owl Capital agreed to find IPI Partnersmanager of a Chicago-based digital infrastructure fund, since ICONIQ Capital and Iron Point Partners for $1 billion.

MORE

– Apollo Global Management agreed to find Barnes GroupBristol, Conn.-based engineering products, various industrial technologies, and solutions provider, for $3.6 billion.

POS

– Upstream Bioa Waltham, Mass.-based breathing disorder-focused biotech company, plans to raise $212.5 million in an offering of 12.5 million shares priced between $15 and $17 on the Nasdaq. The company posted $2 million in revenue for the year ending June 30, 2024. OrbiMed, AI Up, Altshuler Shaham Provident Fund and Pension, Decheng Capital Global Life Sciences Fund, TCG Crossover Fund, HBM Healthcare Investments, Profits Germany, Enavate Sciences, Samsara BioCapital, Omega Fund, History of BCLSand Venrock Healthcare Capital Partners return the company.

– CerebellumThe Sunnyvale, Calif.-based medical technology for neurological conditions company, plans to raise $107.2 million in a $6.7 million offering priced between $14 to $16 on the Nasdaq. The company posted $54 million in revenue for the year ending June 30, 2024. The Rise Fund Clearthought, The Global Value Investment Portfolio Management, Longitude Venture Partners IV, ABG WTT-Ceribell, Red Tree Venture Fundand Optimas Capital Partners Fund return the company.

COST + COST

– Shore Capital Partnersa Chicago-based private equity firm, has raised $1.9 billion in its first healthcare benefit fund, second business services fund, and first investment fund focused on middle market companies in healthcare, food and beverage, business services, industrials, and real estate. sectors.