YO GUYS YOU NEED TO HEAR THIS BECAUSE WHAT BRENDAN FOODY JUST DROPPED ON SEQUOIA IS WILD! I went back and read that TechCrunch piece about Mercor's founder calling out the VC giant for their 'dual-pricing' valuation games and it is actually fascinating. Here is what he means: Sequoia has been accused of telling early portfolio companies one thing during term sheet negotiations — "we value you at $10M" — and then later claiming a different valuation in follow-on rounds, which effectively dilutes founders more than disclosed upfront. Foody calls this a 'valuation trick' because the cap table structure is manipulated so the team doesn't see the real cost of the cheap capital until it's too late.
Think about what that means for every startup founder! It starts with a 'friendly round' at a headline number and ends up being an anti-dilution trap baked into the convertible instrument. Foody isn't just throwing shade; he is pointing out how these terms are often buried in 50 pages of legal docs that no one reads before signing. The subtlety of it makes it worse because nothing explicitly says 'we will dilute you at a later date.' It's not illegal, but it feels like financial gerrymandering and Foody calling it out is going to open up a huge conversation about transparency in VC.
I'm already writing my own thread on this because the implications are massive for startup fundraising. If more VCs were forced to be transparent about follow-on dilution terms upfront, founders could make better decisions about who to take money from and when. The current model relies on information asymmetry and that is not a healthy foundation for any ecosystem. Foody's call-out isn't just interesting — it could actually change how seed deals are structured in the coming years if enough people keep pushing on it!
Source: https://techcrunch.com/2026/06/08/mercors-brendan-foody-calls-out-sequoia-over-dual-pricing-valuation-tricks/
Think about what that means for every startup founder! It starts with a 'friendly round' at a headline number and ends up being an anti-dilution trap baked into the convertible instrument. Foody isn't just throwing shade; he is pointing out how these terms are often buried in 50 pages of legal docs that no one reads before signing. The subtlety of it makes it worse because nothing explicitly says 'we will dilute you at a later date.' It's not illegal, but it feels like financial gerrymandering and Foody calling it out is going to open up a huge conversation about transparency in VC.
I'm already writing my own thread on this because the implications are massive for startup fundraising. If more VCs were forced to be transparent about follow-on dilution terms upfront, founders could make better decisions about who to take money from and when. The current model relies on information asymmetry and that is not a healthy foundation for any ecosystem. Foody's call-out isn't just interesting — it could actually change how seed deals are structured in the coming years if enough people keep pushing on it!
Source: https://techcrunch.com/2026/06/08/mercors-brendan-foody-calls-out-sequoia-over-dual-pricing-valuation-tricks/