Investing in enterprise startups is a long-odds game, but if you play your cards right you can hit the jackpot. That was one of the takeaways of a conversation today between Doug Leone, a partner at storied VC firm Sequoia; Sanjit Biswas, co-founder of enterprise WiFi startup Meraki and Michael Arrington this morning at TC Disrupt in San Francisco.

When Meraki was sold to Cisco last year for $1.2 billion, Sequoia was the lead investor at the time. Today, Leone revealed that his firm make a cool $400 million from that deal — a full one-third of the acquisition price — which it received in cash (although Leone also said he would have preferred it in stock). Leone added that Sequoia continues to stay bullish on enterprise — right now the story is about SaaS, he noted — and he revealed the secret to what makes a that interest into a successful investment.

It’s about doing very little.

“The greatest thing we did for Meraki is that we did nothing,” he said. “We just stood back and let them do their thing.” In other words, if the startup is doing well, and even if it is struggling, you need to let founders make own way forward. Meraki tried out several business plans before finding success, and Leone says he trusted the three founders and stayed hands-off, even in times of crisis.

“I think a lot of companies talk about their pivot as a moment,” Biswas said. “For us, it was more like a walk in the woods.”

Leone’s philosophy extends to areas like hiring, too. While many VCs now tout their firms as full-service providers, helping startups with different aspects of running a business like marketing and staffing, Leone believes that while you can give an enterprise a leg up by helping them initally, say with hiring their first few engineers, that’s where the help should end. He argues that being able to recruit and staff up well on your own should be considered a “core competency.”

Meraki’s Biswas said that his company was on a run rate of $120 million in revenues when Cisco bought it and that’s now up to $250 million. Although Meraki ultimately ended up raising $80 million before its exit, Biswas noted that its early days were very much bootstrapped. Its first customer around that time was Google, which used it for WiFi on its sprawling campus. Google eventually became an investor in the startup’s angel round, but Meraki made it to $2 million in revenues before it raised anything.

Then, even when Meraki started to grow significantly, Biswas and Leone both noted that it was hard for them to move beyond their spendthrift ways. “The most we did when Meraki started to work,” he noted about Sequoia’s turn from its “step back” attitude, “is that we pushed the company to grow as fast as it could. Piss away $5 million in experiments, try to grow as fast as you can.”

“We were very reluctant to spend money,” Biswas retored. He says they “hired a bunch of sales guys, started to work on our marketing” on the back of that order from Leone.

On other topics, Leone made it clear that he felt some VCs are better than others. Greylock, Andreessen Horowitz, Kleiner Perkins and Lightspeed are among the good guys, he noted. Many others that are waning or have disappeared deserved to. Leone also noted that he “feels bad” for entrepreneurs who raise “party rounds” with a lot of investors putting in small amounts of money. He explained that not only do the entrepreneurs risk giving up a lot of equity, but that they will receive less help from each investor who doesn’t own significant equity in the company. ”Because it’s return on time and it’s human nature” Leone explained.

For all of Arrington’s hot warnings yesterday that he would be pushing people on stage to speak up about the NSA, Leone’s and Biswas’ comments were less fire and more fizzle.

Biswas said that as far as he knew, the questions about NSA gathering information didn’t pertain to anything that Meraki made; he didn’t really pass judgment one way or the other on the bigger topic.

As for Leone, he told Arrington, “I’m not as far left as you but I’m not far right.” He noted that the relationship between consumer privacy, government trust and the bloom of the Internet and the communication that it enables was tipping in an alarming slant, and it is up to everyone who has a public voice or influence to try to help set it right. “The delicate balance between freedom and safety has been lost,” he noted. “It’s upon guys like us that we make sure the issue stays in the limelight,” he admitted. “It’s good to ensure it’s in the forefront of conversation, get local politicians involved, bring the issue to light.”

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