Notes on Jim Goetz (WhatsApp deal)

Jim Goetz topped Forbes’ 2016 “Midas” list for his 2010 investment in WhatsApp. Sequoia’s $60 million turned into over $3.4 billion in Facebook stock after WhatsApp’s $22 billion acquisition by Facebook in 2014.

Securing the Initial Deal (Spring 2010) WhatsApp was profitable, paying corporate taxes, and dominating the market—“printing cash,” as Goetz described it. He called it unprecedented in his venture career.

Finding the team was tough: no office sign, ignored emails and calls. Goetz drove to their address, met Jan Koum and Brian Acton at Red Rock, answered questions, and pitched partnership.

Goetz convinced them to raise an $8 million round led by Sequoia at a post-money valuation of ~$100 million (slightly lower than an $80 million target). Sequoia likely got 10–15% ownership.

Jan Koum’s reasons for choosing Sequoia/Goetz: (1) Sequoia’s track record (e.g., Yahoo!), (2) personal chemistry with Jim, (3) hands-off approach—“The business is working… We’re not going to mess with you.”

Rapid Growth and Follow-On Investment

• Oct 2011: 1 billion messages/day.
• Aug 2012: 10 billion messages/day (1–10x growth in one year).
• Feb 2013: 200 million active users worldwide.

(Oct 2013) Sequoia secretly invested another $50 million at a $1.5 billion valuation—a huge markup from the prior $70–80 million valuation, despite being the sole institutional investor.

Key Investor Insights

• Technology vs. Advantage: “You love talking about technology. But as an investor it’s more about understanding how that technology or business process creates an unfair advantage.”
• Pitching Effectively: Only 1 in 15 entrepreneurs conveys their initial market position in under 5 minutes—that grabs attention.
• Investment Focus: “I could rattle off 10 categories we’re actively landscaping, but I’m more interested in what’s not in our landscapes.”