At TechCrunch Disrupt 2025, Roelof Botha, managing partner of Sequoia, argued that the venture capital industry is not an asset class and that investing more money in Silicon Valley does not lead to better companies.
“Investing in venture capital is a risk with no return,” Botha said during an interview on the TechCrunch Disrupt main stage on Monday. “Anyone who has studied the capital asset pricing model understands the fun nature of that. The reason I proposed that is because, if you look at the history of venture capital, it’s an asset that’s not correlated to other asset classes.”
“So a lot of allocators thought you should put a certain percentage of your portfolio into it and more money should go to venture capital, but the truth is there are only a limited number of companies that matter,” Botha continued.
“In my opinion, putting more money into Silicon Valley doesn’t produce more great companies. It actually dilutes that, it actually makes it harder for us to grow these small number of special companies,” Botha added.
Botha pointed out that there are currently 3,000 venture capital firms in the United States, up from 1,000 when he joined Sequoia 20 years ago.
“When I joined Sequoia in 2003, there were no mobile devices,” Botha said. “Cloud computing didn’t exist. There were maybe 300 million people on the planet who had access to the internet. So the scale of opportunity today is completely different. If you look at the numbers technically, I think over the last 20 years there’s been about $380 billion in revenue in the industry,” Botha said.
“It’s a significant number, but I don’t think it will continue to grow just with more money being pumped into the industry.”
