No U.S. venture capital firm has produced more investment gains from China or navigated Beijing’s difficult political landscape better than Sequoia Capital. But as tensions rise between the two countries and the U.S. increasingly restricts cross-border investments, Sequoia Capital’s close ties to the Chinese government may become a liability.

In a previously unreported move that may have given Sequoia Capital China more influence with Beijing, the firm employed Wang Xisha, the daughter of Wang Yang, one of seven members of the Communist Party’s powerful Politburo Standing Committee, according to two people with knowledge of her tenure at the venture firm. Some observers of China’s politics view her father as a potential candidate to be the country’s future premier. Her employment lasted at least four years until she left last year, one of these people said.