Venture Capital Is Not An Asset Class, Says Sequoia’s Roelof Botha

In Brief

At TechCrunch Disrupt 2025, Sequoia managing partner Roelof Botha based on that nan task manufacture isn’t an plus class, and that throwing much money into Silicon Valley doesn’t lead to amended companies.

“Investing successful task is simply a return-free risk,” Botha said during an question and reply connected TechCrunch’s Disrupt’s main shape connected Monday. “Anybody who’s studied nan superior plus pricing exemplary understands nan joke of that. The logic I came up pinch this is, if you look astatine nan history of task capital, it’s an plus that’s uncorrelated pinch different plus classes.”

“And truthful nan reasoning for galore allocators was you should allocate a definite percent of your portfolio to this and much money should travel to task capital, but nan truth is that location are only truthful galore companies that matter,” Botha continued.

“In my opinion, throwing much money into Silicon Valley doesn’t output much awesome companies. It really dilutes that, it really makes it harder for america to get that mini number of typical companies to flourish,” added Botha.

Botha noted that location are presently 3,000 task firms successful nan United States, while location were conscionable 1,000 erstwhile he joined Sequoia 20 years ago.

“When I joined Sequoia 2003 location were nary mobile devices,” said Botha “Cloud computing didn’t exist. There were possibly 300 cardinal group connected nan satellite that had entree to nan internet. So nan standard of nan opportunity coming is wholly different. If you look technically astatine nan numbers, I deliberation for nan past 20 years, there’s astir been $380 billion+ outcomes successful nan industry,” Botha said.

“That’s a important number, but I don’t deliberation it will proceed to standard conscionable pinch much money going into nan industry.”

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