“Reproducing the conditions that made Sequoia’s hallways electric”
A dialogue between Craig Shapiro (Founder, Collaborative Fund) and Tom McMurray (Former General Partner, Sequoia Capital)
Collaborative Fund recently launched AIR, a new kind of accelerator for design-led AI products. It draws inspiration from the institutions that reshaped creative possibility in their time, places that brought together unlikely collaborators at key moments of technological and cultural inflection.
As we recruit for the first cohort, we’re talking to people who had a hand in creating those lighting rod moments. A few weeks ago we asked Nicholas Negroponte, founder of the MIT Media Lab, to reflect on what happens when culture and technology collide to create new ways of thinking.
Today we’re talking to Tom McMurray, former General Partner at Sequoia, who helped shape Silicon Valley’s first golden age. Tom was an early investor in Yahoo, Redback Networks, C-Cube, NetApp—and, importantly, Nvidia. He now serves on multiple boards focused on science and impact. We spoke to him about pattern recognition, capital discipline, and why he’s an investor in AIR.
Craig Shapiro: Tom, you joined Sequoia just as the first Internet wave was forming. Your portfolio reads like a Hall of Fame roster. What were the core filters you used back then?
Tom McMurray: It was very clear where to invest in the networking space—bandwidth was in high demand. It was less clear in the pure Internet space. Our diligence process was pretty established so we continually developed more refined filters and leveraged off our core capability in chips and enterprise software. In the case of Nvidia we had what I call a Sequoia moment—that wonderful nonlinear diligence process where after parsing through the business, we reached a point where there’s only a single question left to decide. Our secret sauce was that we often knew many times more than the founders did about their business. We understood where the real risks were.
For companies like Nvidia, our expertise in semiconductors from investments in Cypress, Microchip, LSI Logic, and Cadence, plus our experience with gaming companies, meant the market risks were very low. We could easily do due diligence on the founders because many worked for friends of Sequoia Partners—this was our sweet spot in the 1990s. And in the Internet wave, we had special insight through our investments in Cisco and Yahoo. They were market pioneers who saw the world 3-5 years ahead of us. They pointed the way many times, and we just jumped on it.
Speaking of Nvidia, walk us through what happened when Jensen Huang first pitched Sequoia.
Wilf Corrigan, a Sequoia Technology Partner and CEO at LSI Logic (where Jensen worked before starting Nvidia), told him to talk to Don Valentine at Sequoia about his “chip idea.” Jensen pitched the evolving game world and the need for more performance. Honestly, I had no idea at that point why we should invest in the company. But we asked harder and harder questions about team, competition, distribution, and got solid answers.
About 90 minutes into the pitch, Pierre Lamond asked Jensen how big the chip was. Jensen said “12 mm.” Pierre looked at Don and Mark; they nodded, and we committed to the investment on the spot. We led the Series A and Mark joined the board. The rest is history.
The critical question wasn’t about market size or vision—it was “can they build the chip, get the performance, and the price point?” That’s why the chip size question was the deciding factor. The semiconductor partners at Sequoia—Don, Pierre, and Mark—understood the significance immediately.
Fast-forward to today. Collaborative Fund just launched AIR, an AI residency in New York. You are an investor! Why?
Because you’re reproducing the conditions that made Sequoia’s hallways electric in the ’90s—cross-pollination of builders, researchers, and designers who argue, prototype, and iterate in the same room. Great companies are rarely solo acts; they’re jazz ensembles riffing toward a common groove.
What early-stage pattern recognition from Sequoia days should our AIR founders tattoo on their whiteboards?
The secret is to lean on your wins, learn from them, apply it as you expand, iterate, and keep going.
“Stay cheap until it hurts.” Capital efficiency forces clarity. The companies that survived the dot-com crash had burn rates lower than their Series A checks.
Critics worry AI will erase jobs or amplify bias. You’ve seen every tech cycle: where’s your compass pointing?
Every wave starts messy. But history says two truths persist:
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Jobs evolve faster than they evaporate. Cisco killed some circuit-switch jobs yet birthed the entire network-engineer class.
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Bias follows data, not silicon. Fix the training data, and you fix 80 percent of the problem. That’s human homework, not machine destiny.
The “force for good” part kicks in when entrepreneurs bake guardrails into the business model, not just the codebase.
Last one. A founder walks into AIR with nothing but conviction. You’ve got one question before you decide to invest—what is it?
I’d look for that “Sequoia Moment”—where after all the questions about team, market, and technology, we identify the single critical factor that determines success. For Nvidia, it was “how many millimeters wide is the chip?” Sometimes, it’s these seemingly simple technical questions that reveal whether a company can execute on its vision.
Golden. Thanks, Tom. Here’s to building AI companies that deserve to exist.
And to founders who remember: progress isn’t inevitable—people make it so.