Venture capital is not an asset class, says Sequoia’s Roelof Botha

At TechCrunch Disrupt 2025, Sequoia managing partner Roelof Botha argued that the venture industry is not an asset class, and throwing more money at Silicon Valley doesn’t lead to better companies.

“Investing in startups is a return-free risk,” Botha said Monday during an interview on TechCrunch’s Disrupt main stage. “Anyone who has studied the capital asset pricing model understands the joke. The reason I bring it up is, if you look at the history of venture capital, it’s an asset that’s uncorrelated with other asset classes.”

“And so a lot of allocators thought you should allocate a certain percentage of your portfolio to that and more money should flow into venture capital, but the truth is that only so many companies matter,” Botha continued.

“In my opinion, throwing more money into Silicon Valley doesn’t get bigger companies. It actually slows it down, it actually makes it harder for us to develop those small niche companies,” Botha added.

Botha noted that there are currently 3,000 venture firms in the U.S., compared to just 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 using the Internet. So the scale of the opportunity today is completely different. If you look at the numbers technically, I think, over the last 20 years, roughly both have been $380 billion industries.”

“It’s a significant number, but I don’t think it will continue to scale with more money in the industry.”