One of the most eminent sequoia investors, managing partner of Roelof Both, sees the signs of one other brewing of a series of greed in the capital of the investment, in which the least sophisticated investors will probably be the most hurt.
Published WARNING FOR X On Thursday, writing: “We remain intended to repeat the mistakes of the past! SPV approaches, where the main investor speaks for less than 10% of the capital, but willingly sets the latest set of tourist Chumps, which think that this time history will end differently. Only 3 years have passed. “(He interrupted the post by exploding the emoji.)
This last cycle ended badly. In 2022, the VC market finished from 2021 broke up. The precipitation is still going on, with 2025 expected one other brutal 12 months of unsuccessful startups.
Botha is a specially warning about special purpose vehicles (SPV) – a structure that permits the investor to start to sell access to some of his shares to others. But recent investors do not really buy a startup shares; They buy SPV shares, often at very inflated prices. This signifies that the startup valuation would have to increase only for some SPV Share owners.
SPVs develop into particularly common in investing AI, where some startups increase the astronomical sum. Search of the SEC documents found on the website At least nine SPV He has been associated with Anthropic since the same 2024. Apparently the company is conducting talks about collecting one other $ 3.5 billion.
Apparently, an attempt to raise $ 1.5 billion is also full SPV information. Remember that no company is in the sequoia portfolio.
The trend is not limited to a few corporations. Almost every important multi -billion company AI has investors offering SPV. And if a well-known VC company, let’s say, archival Andreessen Horowitz Sequoia-will keep the contract, the name itself can lure buyers.
One person involved in secondary markets describes such contracts related to SPV: “They transfer a hat in all contracts that cannot find a sufficient number of VC investors, and the company names raises a small amount, and these stupid family offices say oh,” Andreessen leads, it have to be good “,” although we know that these are their worst corporations that can’t raise money from traditional VC. “
Bothy message to these potential investors? “Don’t buy it.”
Sequoia did not immediately answer to the request for further comment.