Sequoia’s managing partner, Roelof Botha, at TechCrunch Disrupt 2025, posited that the venture sector isn’t truly an asset class, and simply injecting more capital into Silicon Valley doesn’t guarantee the creation of superior enterprises.
During a TechCrunch Disrupt main stage interview on Monday, Botha stated, “Venture investing is essentially a risk without commensurate return. Anyone familiar with the capital asset pricing model understands the inherent irony. My assertion stems from the historical performance of venture capital, which reveals its lack of correlation with other asset classes.”
Botha elaborated, “Consequently, many allocators believed in allocating a fixed percentage of their portfolios to venture, assuming increased capital flow would benefit the sector. However, the reality is that only a select few companies truly make a difference.”
Botha added, “In my view, simply funneling more money into Silicon Valley does not automatically translate to more exceptional companies. In fact, it can dilute the potential and make it more challenging for the truly special companies to thrive.”
Botha pointed out that the United States currently has 3,000 venture firms, a significant increase from the 1,000 firms present when he joined Sequoia two decades prior.
Botha stated, “When I started at Sequoia in 2003, mobile devices were nonexistent. Cloud computing was in its infancy. Approximately 300 million individuals globally had internet access. The scale of opportunity today is fundamentally different. Statistically, over the past 20 years, the industry has seen roughly 380 outcomes exceeding a billion dollars,” Botha noted (approximately 20 per year).
“That’s a substantial figure, but I don’t foresee that scaling indefinitely simply by injecting more capital into the sector.”
