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Sequoia Capital’s chief operating officer resigned over comments made by partner Shaun Maguire which she regarded as Islamophobic, as political debates sow division at one of Silicon Valley’s most powerful venture capital firms.
Sumaiya Balbale — a practising Muslim who has spoken publicly about how her gender, ethnicity and faith have shaped her career — stepped down after five years at the company in August. Her decision to leave was precipitated by Maguire’s social media posts, according to three people with knowledge of the matter.
Maguire, an outspoken and high-profile investor who is close to Elon Musk, wrote on X in July that New York mayoral candidate Zohran Mamdani “comes from a culture that lies about everything. It’s literally a virtue to lie if it advances his Islamist agenda. The West will learn this lesson the hard way.”
Balbale complained to other senior partners at the firm, who declined to take action against Maguire, arguing he was just exercising his right to free speech, the people said. She left soon after, feeling her position was untenable.
Her departure caused consternation among staff and portfolio companies, the people said. Balbale, who is on the board of Shake Shack, was well regarded internally and by the start-ups she worked with as an experienced operating executive.
Maguire walked back some of his comments in posts and long videos — drawing a distinction between criticising Islamism, a political ideology, and Muslims in general. But Sequoia’s reluctance to rein him in has caused friction between staff and sparked debate across the tech sector.
Sequoia declined to comment. Maguire and Balbale did not respond to requests for comment.
The saga has become a problem for Roelof Botha, Sequoia’s managing partner, who has tried to keep peace internally. He held an “all-hands” meeting to address the issue, while trying to limit wider fallout by not commenting publicly, according to a person with knowledge of the meeting.
In interviews, Botha has described the firm’s approach as “institutional neutrality” and said staff are entitled to their own positions.
Maguire’s posts about Mamdani were criticised by multiple other colleagues, said people with knowledge of the disputes. Senior figures told him he had a right to speak his mind but should consider the reputation of the firm.
Maguire is one of Sequoia’s most successful investors, having cultivated close ties to Musk and won a devoted following among some founders who admire his intellect and outspoken style.
“He’s genuinely one of the polymaths and there aren’t many of those left,” said one person who has taken investment from Maguire.
A physicist with a PhD in quantum gravity, his investments in Musk’s start-ups such as xAI, SpaceX, Neuralink, and Boring Company have proved lucrative for Sequoia.
The runaway success of SpaceX in particular has earned him “a lot of rope” at the firm, the people added. The rocket and satellite company was valued at $400bn in a recent employee share sale and has netted Sequoia a gain of about $4bn on paper, said a person with knowledge of the matter.
Maguire’s other political stances have also drawn pushback from colleagues. Earlier in the year, he posted on X in support of Germany’s right-wing AfD party.
This prompted a series of X posts by Luciana Lixandru, a London-based Sequoia partner who has family in Germany, who said she “felt compelled” to share her views.
“I find extremism on either side a dangerous undercurrent in our society,” she wrote in January. “I believe in political leaders and parties who encourage strong policies to further growth, but who also support equal rights for all and who share my social values. AfD is certainly not that party.”
Maguire replied: “One of the beautiful things about Sequoia is that we’re comfortable disagreeing with each other. Personally I think it’s the secret to the firm’s historical investment success.”
Maguire’s rhetoric — which spans from passionately defending Israel’s actions in Gaza, to endorsing UK anti-immigration activist and convicted criminal Tommy Robinson — has also led to private complaints from executives at Sequoia’s portfolio companies and institutional investors, the people familiar said.
More than 1,000 founders and tech employees signed an open letter calling for Maguire to be disciplined. This was followed by a counter-letter with a similar number of signatories supporting him.
The scandal has also soured Sequoia’s relationship with some top Middle Eastern investors. One financier based in the region who has worked with Sequoia described Maguire’s comments as “a humiliation”.
“A lot of sovereign wealth funds from this part of the world are not going to work with this guy, that’s for sure . . . he is not welcome here,” he said. “You work for your limited partners and founders, you are entrusted with serious capital by investors,” the person added. “This is not good for the brand.”
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