Sequoia’s Roelof Botha warns ‘chumps’ not to buy into SPVs

One of Sequoia’s most prominent investors, managing partner Roelof Botha, sees signs of another greed cycle brewing in venture capital, one where the least sophisticated investors will likely get most hurt. He posted a warning on X on Thursday, writing, “We remain destined to repeat the mistakes of the past! SPVs are making a come-back, where the lead investor speaks for less than 10% of the capital, yet eagerly lines up the latest set of tourist chumps who think the story will end differently this time. It’s only been 3 years.” (He punctuated the post with an exploding-head emoji.) That last cycle ended badly. In 2022, the overheated VC market of 2021 crashed. The fallout is still ongoing, with 2025 expected to be another brutal year of failed startups. Botha is specifically warning about special purpose vehicles (SPVs) — a structure that allows a startup’s investor to sell access to a chunk of their shares to others. But the new investors are not actually buying shares in the star ... Read full article.