During the TechCrunch Disrupt 2025 event, Sequoia managing partner Roelof Botha presented a contrarian view, stating that the venture industry does not constitute an asset class and that investing more money in Silicon Valley does not necessarily lead to the creation of better companies.

Botha expressed his thoughts on the matter during an interview on the main stage of TechCrunch’s Disrupt, which took place on Monday. He referred to investing in venture capital as a “return-free risk,” explaining that “any individual who has studied the capital asset pricing model is aware of the inherent joke in this concept.” He elaborated, “Upon examining the history of venture capital, it becomes evident that this asset class is uncorrelated with other asset classes.”

## The Dynamics of Venture Capital Allocation

Botha continued, “The prevailing thought among many allocators is that a specific percentage of one’s portfolio should be allocated to venture capital, under the assumption that more money flowing into the sector would yield better outcomes.” However, he countered this notion, stating, “The reality is that there are only a limited number of companies that truly matter and make a significant impact.

In my opinion, injecting more capital into Silicon Valley does not result in the emergence of more exceptional companies. On the contrary, it has a diluting effect, making it more challenging for a small number of special companies to flourish and reach their full potential,” Botha added.

## The Evolution of Venture Capital

Botha noted that the number of venture firms in the United States has increased significantly, from approximately 1,000 when he first joined Sequoia 20 years ago to over 3,000 today.

Reflecting on his early days at Sequoia, which began in 2003, Botha remarked, “At that time, mobile devices were nonexistent, cloud computing had not yet emerged, and only about 300 million people worldwide had access to the internet.” He emphasized that the scale of opportunities has changed dramatically since then, citing the technical numbers, which indicate that over the last 20 years, the industry has witnessed roughly $380 billion in outcomes.

Despite this substantial figure, Botha expressed skepticism regarding the sustainability of this growth, stating, “I do not believe that this trend will continue to scale solely due to increased investments in the industry.”