At TechCrunch Disrupt 2025, Sequoia managing accomplice Roelof Botha argued that the enterprise business isn’t an asset class, and that throwing extra money into Silicon Valley doesn’t result in higher firms.
“Investing in enterprise is a return-free danger,” Botha stated throughout an interview on TechCrunch’s Disrupt’s principal stage on Monday. “Anyone who’s studied the capital asset pricing mannequin understands the joke of that. The rationale I got here up with that is, in the event you take a look at the historical past of enterprise capital, it’s an asset that’s uncorrelated with different asset lessons.”
“And so the pondering for a lot of allocators was you must allocate a sure share of your portfolio to this and extra money ought to stream to enterprise capital, however the fact is that there are solely so many firms that matter,” Botha continued.
“For my part, throwing extra money into Silicon Valley doesn’t yield extra nice firms. It really dilutes that, it really makes it more durable for us to get that small variety of particular firms to flourish,” added Botha.
Botha famous that there are at present 3,000 enterprise corporations in the US, whereas there have been simply 1,000 when he joined Sequoia 20 years in the past.
“After I joined Sequoia 2003 there have been no cell gadgets,” stated Botha “Cloud computing didn’t exist. There have been possibly 300 million individuals on the planet that had entry to the web. So the size of the chance immediately is totally totally different. If you happen to look technically on the numbers, I feel for the final 20 years, there’s roughly been $380 billion+ outcomes within the business,” Botha stated.
“That’s a big quantity, however I don’t suppose it can proceed to scale simply with extra money going into the business.”
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