Key Takeaways

  • Scott Malpass built Notre Dame's endowment from $400 million to more than $20 billion over 32 years by securing early access to elite venture managers.
  • In his initial pitch to Don Valentine and Mike Moritz, Malpass committed Notre Dame to venture capital when both the university's pool and Sequoia Capital were relatively small.
  • Sequoia expanded into new strategies and geographies like China while keeping its core early-stage venture funds disciplined at $500 million to $600 million.
  • General partners who isolate expansion vehicles protect their core early-stage funds from the asset bloat that crushes venture returns.
  • Thirty years of relationship equity meant access never changed as Notre Dame grew fiftyfold in asset size.

Walking into Don Valentine's Office

In the late 1980s, Notre Dame held an endowment of just $400 million. Scott Malpass decided the university needed direct exposure to venture capital and private markets, asset classes most endowments still avoided. He booked a meeting with Sequoia Capital founder Don Valentine.

Valentine listened, then brought in Mike Moritz to join the discussion. Malpass laid out his vision: Notre Dame was changing its strategy and wanted an allocation in Sequoia's next fund.

“I let them know that we're doing some new things in Notre Dame. We want to invest more in private markets and venture capital. And I would love for them to consider us when they raise their next fund,” Malpass recalled.

Sequoia took the capital. Over the next three decades, Notre Dame's endowment swelled fiftyfold to surpass $20 billion. Despite Sequoia's rise to the top of Silicon Valley, the dynamic between allocator and manager stayed constant.

“And despite their incredible success, I never had trouble getting to see them, talk to them. I never had any problem. They didn't treat me any differently from day one to 30 years later,” Malpass said.

Capping Core Funds at $600 Million

Most venture firms fail when they succeed. Capital floods in after a string of hits, and managers raise multi-billion-dollar main funds to collect management fees. When an early-stage fund balloons to $2 billion, returning a 5x multiple requires generating $10 billion in net proceeds. That arithmetic forces investors to abandon early-stage discipline, write massive checks into inflated rounds, and chase late-stage momentum.

Sequoia avoided that trap by decoupling geographic and product expansion from their flagship vehicle. When they launched regional vehicles in China and other global markets, they resisted the temptation to inflate their core Silicon Valley fund.

“When they added new products in capital but it's been very specific reasons to take advantage of very specific trends and we evolved with them,” Malpass explained. “We invested in all those products over time but their early stage venture fund is still very small. It's still 500 million or so, 500 to 600 million.”

By capping the early-stage vehicle at $500 million to $600 million, the fund could still return fund-making multiples from early ownership stakes in breakout tech winners. The firm created distinct vehicles for distinct stages and regions rather than mixing them into one unmanageable pool.

The Long-Term LP Contract

Institutional investors often churn manager relationships every few fund cycles based on short-term quarterly performance metrics. Malpass approached partnership from a decades-long perspective. He treated manager selection as a generational commitment where both parties grew side by side.

“When I started with them, we had $400 million in endowment,” Malpass said. “Now the Notre Dame endowment's over 20 billion. And they were extremely small, but we both evolved.”

That patience aligned incentives between the capital allocator and the investment firm. Allocators who jump between managers miss the compounding effects of long-held relationships. For Malpass, the mutual alignment produced durable financial gains for the university while backing market-defining businesses.

“I just felt a common bond in the sense of we've done this together and this is really great. We created some great companies. We've created massive wealth for a lot of nonprofit institutions and there was just a common sense of fulfillment and we had fun doing it,” Malpass reflected.

Why It Matters

Top-tier venture returns require strict limits on fund sizes, even when institutional allocators demand larger capital allocations. By spinning out separate vehicles for growth stages and international markets while locking early-stage funds at $500 million to $600 million, elite managers prevent the return dilution that destroys early-stage power-law economics.