In an unusual move, Sequoia Capital has cautioned its portfolio companies against doing business with Algo Legal, a law firm run by the Silicon Valley venture capital firm’s former general counsel in India.
The US venture capital firm said that a recently concluded investigation had brought to light “concerning details” about the law firm and its related entities, according to an undated note by Sequoia to the founders of the companies backed by the VC firm.
“Sequoia India SEA came to be informed of all concerning incidents involving Algo Legal, a service provider associated with a former senior Sequoia India employee, and related entities,” said an undated note by Sequoia to the founders of the companies backed by the VC firm.
The VC firm advised portfolio companies that have hired Algo Legal or its related entities or dealt with them to alert its legal adviser AZB and Partners about the relationship.
“Sequoia and SEA (and affiliated entities) have terminated all arrangements pursuant to which any services were being provided to the firm by Algo Legal and related entitles and have referred the matter to legal advisers to seek their counsel, if any, to be taken,” said the note.
Sequoia terminated its business engagement with Algo Legal in February, according to three people familiar with the development, although the venture capital firm wrote to its portfolio companies on Friday.
Kapoor was the first lawyer hired by Sequoia when the VC firm appointed him as the general counsel for India in June 2010. Up until his departure in March 2019, Kapoor oversaw over 1,500 rounds of investments made by Sequoia in startups across India and South East Asia. Before joining Sequoia, Kapoor was the general counsel in South Asia at Intel Technology and senior attorney at Intel Capital.
Kapoor said he could not respond immediately because of a family emergency.
Dhruv Nagarkatti, the chief operating officer at Algo Legal, declined to comment when Mint, in an email on 27 April, asked if Sequoia had snapped all business ties with the law firm. The Sequoia note did not say what prompted the VC firm to terminate its business engagement with Algo Legal.
The VC firm also did not identify the portfolio company where the details against Algo Legal emerged.
In the note to founders, Sequoia also said it does “not endorse any firm, entity or person as a preferred service provider for itself or any of its portfolio companies”.
Sequoia is one of the world’s most successful venture capital firms and is known for its early investments in Apple Inc. and Google, among other companies.