Mercor CEO Accuses Sequoia of 'Dual-Pricing' Valuation Tricks
Tags Enterprise
Mercor co-founder Brendan Foody publicly accused Sequoia Capital on X of a 'dual-pricing' practice where the firm invests in two tranches at different valuations within the same round, inflating headline valuations. Foody cited examples including Serval, which announced a $75M Series B at $1B valuation led by Sequoia but was valued at less than $400M in a Series A extension days earlier, and Aaru, which had a $1B headline valuation while the lead investor backed it at $450M. Sequoia partner Shaun Maguire responded that the practice has happened 'approximately five times' in his 7 years at the firm, framing it as market reality.
Technical significance
The public airing of dual-pricing practices highlights growing tension between founders and VCs over valuation transparency. If dual-pricing becomes widely scrutinized, it could lead to regulatory attention on private market valuation practices and force changes to how 409A valuations are communicated to employees. For the startup ecosystem, this erodes trust in headline valuation numbers that have traditionally been used as recruiting tools.