At TechCrunch Disrupt 2025, Sequoia managing associate 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 corporations.
“Investing in enterprise is a return-free danger,” Botha stated throughout an interview on TechCrunch’s Disrupt’s major stage on Monday. “Anyone who’s studied the capital asset pricing mannequin understands the joke of that. The explanation I got here up with that is, in the event you have a look at the historical past of enterprise capital, it’s an asset that’s uncorrelated with different asset lessons.”
“And so the considering for a lot of allocators was it is best to allocate a sure share of your portfolio to this and extra money ought to circulate to enterprise capital, however the reality is that there are solely so many corporations that matter,” Botha continued.
“For my part, throwing extra money into Silicon Valley doesn’t yield extra nice corporations. It really dilutes that, it really makes it tougher for us to get that small variety of particular corporations to flourish,” added Botha.
Botha famous that there are at present 3,000 enterprise companies 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 cellular units,” stated Botha “Cloud computing didn’t exist. There have been perhaps 300 million folks on the planet that had entry to the web. So the size of the chance at the moment is totally completely different. In the event you look technically on the numbers, I feel for the final 20 years, there’s roughly been 380 billion-dollar-plus outcomes within the business,” Botha stated (that means roughly 20 per 12 months).
“That’s a major quantity, however I don’t suppose it can proceed to scale simply with extra money going into the business.”
