Step 2: Sequoia is snubbed once again from Facebook craze when Slide - founded by former Paypal encryption wunderkind Max Levchin - launches slide show maker for social networks. Social networking craze ensues… then starts to fizzle.

Step 3: Having had enough of being shut out of the FB ecosystem, Sequoia leads Series A (in January 2007 at $1.5M) and Series B (in March 2007 at $15M) rounds for Rock You, Slide’s arch enemy in FB app ecosystem. Note timing of Series B: right before FB launches apps.

Step 4: Realizing FB apps is as valuable as a warm bucket if spit, Sequoia (along with initial investors First Round, and Lightspeed Ventures) pass on investing in Series C round to display greater fool theory in mimicking Slide’s mammoth $50M round, get DCM to ride on Sequoia and First Round’s coattails by investing a $35M - the day after Slide says FB apps are pretty much useless. It’s worth noting, by the way, that according to one contributor on TheFunded, “would not take money from DCM if offered”.

Step 5: Sequoia can brag that they are participating and helped finance the FB craze… blah-blah-blah until next fad; DCM can claim that they invested alongside the great and venerable Sequoia.

Rock You now has raised over $51.6M in funding. Slide is up to $58M. That is early $110M in funding alone… would you pay $110M for both companies in a buyout?

I wouldn’t… see our first piece here.

UPDATE: Venture Beat notes: “Doll Capital Management led the round, providing $30 million. The remainder $5 million was provided by existing investors, Sequoia, Partech and Lightspeed.”

Yeah… that changes everything I said.  Right…