Sequoia’s Roelof Botha warns ‘chumps’ not to buy into SPVs

One of the most prominent investors in Sikoia, Managing Partner Rolof Botha, Venture Capital sees the symptoms of another greed cycle, where the least sophisticated investors will probably be the most injured.

He’s a post Alert about x On Thursday, “We are destined to repeat past mistakes,” he wrote! SPVs are creating an coming, where main investors have spoken for less than 10% of capital, yet the eagerly eagerly created the latest set of tourists who think that the story will end separately. It has only 3 years passed. “(He paused the post with an explosive-head emoji.)

That last cycle ended badly. In 2022, the overly heated VC market of 2021 was crash. The resultout is still going on, 2025 failed startups are expected to be another brutal year.

Both is alerting to the special purpose of the Special Purpose Vehicle (SPV) – a structure that allows a startup investor to sell access to a portion of their share to others. However, new investors are not actually buying shares at startup; They are buying SPV’s shares, often at a lot of inflamed pricesThe That means the startup evaluation only needs to increase the SPV stock owners even to break even.

SPVs are becoming especially common in AI investment, where some startups are increasing the amount of astronomy. SEC looks for a search for filing At least nine SPV Tied with ethnographic since only 2024. The company is reported to be in the discussion to raise others $ 3.5 billionThe

Figure AI’s attempt to raise $ 1.5 billion is also reported to be full of every SPV InformationThe Note that a company is not in Sikoiya’s portfolio.

The trend is not limited to just a few companies. Almost every major-billion AI company has SPV suppliers in investors. And if a big VC firm-bolon, Sikoier Archrival Andresen Harovits-is leading the agreement, that name can be greedy among the buyers.

A person involved in the secondary market describes the SPV-Bouzhai Agreements: “They are offering all the contracts that are not getting enough VC investors and the name company keeps a small amount of the company and these foolish family offices say oh,” Andresen must be good, though we know that their worst agencies are the worst agencies that are the worst agencies. “

Botha message to these investors? “Don’t buy it.”

Sikoia did not immediately respond to any request for further comments.