Your answer seems correct. Moritz and Sequoia invested allot of money ($10 millions) over 10 years ago into Green Dot. 'Sequoia Capital owned about 30% of the company during its over $2 billion IPO last year.'[1] Needless to say Sequoia and Moritz have allot of power at Green Dot.

Now if we ask ourselves if Loopt was not a Sequoia company, would Green Dot have paid that much money for Loopt's people and technology. They could of easy got a better deal somewhere else.

However I think Sequoia needed to save face on Loopt. They needed to make sure it had an successful exit. The more successful company's in Sequoia portfolio the more investors are willing to invest in them right?

[1]http://www.quora.com/Green-Dot-company/Why-did-Sequoia-inves...

I don't know why PG is trying to hype this up. I see ycombinator becoming more and more like a old boys network.

If your doing a startup don't get discouraged. The reason you should be doing it in the first place is cause you truely believe in the product and the business and not looking to flip your startup for quick cash.