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

During his appearance at TechCrunch Disrupt 2025, Roelof Botha, managing partner at Sequoia, made a bold assertion: the venture capital sector should not be viewed as a traditional asset class. He emphasized that simply increasing investments in Silicon Valley does not guarantee the emergence of superior companies. "Investing in venture is essentially a return-free risk," Botha remarked in an engaging interview on the main stage. He further explained that anyone familiar with the capital asset pricing model would recognize the irony in treating venture capital as an asset class. Historically, venture capital has exhibited characteristics that do not correlate with other investment classes. Botha elaborated on the misconceptions surrounding venture capital allocation, noting that many investors believe they should dedicate a portion of their portfolios to this sector. However, he argued that the number of truly impactful companies is limited. "In my view, pouring more capital into Silicon Valley does not foster the creation of more exceptional companies; it actually complicates the process of nurturing the few standout companies that do exist," he stated. Highlighting the current landscape, Botha pointed out that the U.S. hosts around 3,000 venture firms today, a significant increase from just 1,000 when he joined Sequoia two decades ago. Reflecting on the changes since 2003, he mentioned, "When I came to Sequoia, mobile devices were non-existent. Cloud computing was still a concept. At that time, only about 300 million people worldwide had internet access." Botha concluded by acknowledging the substantial financial outcomes the industry has seen, with over $380 billion generated in the last 20 years. However, he cautioned that this growth may not persist solely due to increased funding in the sector.