At TechCrunch Disrupt 2025, Sequoia managing partner Roelof Botha argued that the venture industry isn’t an asset class, and that throwing more money into Silicon Valley doesn’t lead to better companies.

“Investing in venture is a return-free risk,” Botha said during an interview on TechCrunch’s Disrupt’s main stage on Monday. “Anybody who’s studied the capital asset pricing model understands the joke of that. The reason I came up with this is, if you look at the history of venture capital, it’s an asset that’s uncorrelated with other asset classes.”

“And so the thinking for many allocators was you should allocate a certain percentage of your portfolio to this and more money should flow to venture capital, but the truth is that there are only so many companies that matter,” Botha continued.

“In my opinion, throwing more money into Silicon Valley doesn’t yield more great companies. It actually dilutes that, it actually makes it harder for us to get that small number of special companies to flourish,” added Botha.

Botha noted that there are currently 3,000 venture firms in the United States, while there were just 1,000 when he joined Sequoia 20 years ago.

“When I joined Sequoia 2003 there were no mobile devices,” said Botha “Cloud computing didn’t exist. There were maybe 300 million people on the planet that had access to the internet. So the scale of the opportunity today is completely different. If you look technically at the numbers, I think for the last 20 years, there’s roughly been 380 billion-dollar-plus outcomes in the industry,” Botha said (meaning roughly 20 per year).

“That’s a significant number, but I don’t think it will continue to scale just with more money going into the industry.”