Mercor’s Brendan Foody calls out Sequoia over ‘dual-pricing’ valuation tricks

In recent days, founders and founders-turned-investors took to X to share horror stories about being mistreated by VCs. Their complaints ranged from VCs falling asleep during pitch meetings to investors suggesting a founder fire a co-founder. Brendan Foody, co-founder of the AI talent platform Mercor, which was last valued at $10 billion , went so far as to call out Sequoia, arguably one of the most elite VC firms in the world. “The “sequoia scam” is worse than a single horror story,” Foody wrote on X . “in the last 6 [months] ive seen a half dozen rounds where sequoia invests in 2 tranches. everyone pretends they only did the higher valuation. founders misrepresent this to their employees & then shop it to angels too.” TechCrunch has previously reported on VCs investing in the same round at different valuations. Under this mechanism, the lead VC firm invests a significant chunk of its capital at a lower, preferential valuation, while putting a much smaller portion of capital in at a drastically higher price. The massive “headline” valuation that gets announced manufactures the perception of a dominant market winner, masking the fact that the lead investor’s actual average entry price was significantly lower. The disparity can be stark. For example, when the AI-driven IT helpdesk startup Serval announced a $75 million Series B at a $1 billion valuation, the announcement didn’t tell the whole story. …