At TechCrunch Disrupt 2025, Roelof Botha, managing partner of Sequoia, argued that the venture industry is not an asset class and that throwing more money into Silicon Valley does not lead to better companies.
“Investing in venture capital is a risk without return,” Botha said Monday during an interview on the main stage of TechCrunch’s Disrupt. “Anyone who has studied the capital asset pricing model gets the joke. The reason I came up with this is because if you look at the history of venture capital, it is an asset that is not correlated with other asset classes.”
“And so the thinking among many allocators was that you should allocate a certain percentage of your portfolio to this and more money should flow into venture capital, but the truth is there are only so many companies that matter,” Botha continued.
“In my opinion, throwing more money at Silicon Valley doesn’t produce more great companies. It actually dilutes that, in fact, it makes it harder for us to help that small number of special companies thrive,” Botha added.
Botha noted that there are currently 3,000 venture capital firms in the United States, compared to just 1,000 when he joined Sequoia 20 years ago.
“When I joined Sequoia 2003, there were no mobile devices yet,” says Botha. “Cloud computing didn’t exist. There were perhaps 300 million people on the planet who had access to the internet. So the scale of the opportunity today is completely different. If you look at the numbers technically, I think there has been roughly over $380 billion in results in the industry over the last 20 years,” Botha said.
“That’s a significant number, but I don’t think it will continue to grow if there’s just more money coming into the sector.”
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