The Trump administration began taking direct shares in American firms not as a part of temporary crisis measures, as in 2008, but as a everlasting element of business policy.
These moves raise interesting questions, including what happens when the White House involves your table.
Last week at the TechCrunch Disrupt conference in San Francisco, Sequoia Capital global manager Roelof Botha answered this exact query, and his response drew laughter from the packed room: “One of the most dangerous words in the world is: ‘I’m from the government and I’m here to assist.’
Botha, who describes himself as “an inherently libertarian free-market thinker,” conceded that industrial policy has its place when national interests require it. “The only reason the United States is resorting to this is because we have other nation states that we are competing with that are using industrial policy to support their industries that are strategic and perhaps detrimental to the United States’ long-term interests.” In other words, China is in this game, so the United States must go along with it.
Nevertheless, during his speech it was unattainable not to note his discomfort with the government as a co-investor. And this caution extends beyond Washington. In fact, Botha sees disturbing echoes of the pandemic-era financing circus in today’s market, although he refrained from using the word “bubble” on stage. “I think we are in a period of incredible acceleration,” he said more diplomatically, while warning against valuation inflation.
He told the audience that the morning of his speech, Sequoia had already reported on a portfolio company whose valuation increased from $150 million to $6 billion in a twelve-month period in 2021, only to crash back to Earth. “The challenge you pose inside the company for the founders and the team, [is] you feel like you’re on that trajectory and then you have success, but it’s not as good as you expected at one point.”
It’s tempting to maintain raising money to take care of momentum, he continued, but the faster valuations rise, the further they’ll fall, and nothing demoralizes a team greater than watching its paper fortune evaporate.
Techcrunch event
San Francisco
|
October 13-15, 2026
His advice to founders navigating these frothy waters was twofold: If you do not have to reap fish for at least twelve months, don’t do it. “You’re probably better off building because in 12 months your company will be worth a lot more,” he said. On the other hand, he added, if you would like capital in six months, get it now while the money is flowing in, because markets like the one we’re in now can turn sour quickly.
As someone who studied Latin in highschool (his words), Botha turned to classical mythology to elucidate this point. “I read the story of Daedalus and Icarus in Latin. And that stuck with me, the idea that if you fly too hard and too fast, your wings might melt.”
When founders hear Botha’s opinion in the market, they listen, and understandably so. The company’s portfolio includes early bets on Nvidia, Apple, Google and Palo Alto Networks. Botha also kicked off his Disrupt appearance with news about Sequoia’s two newest investment vehicles: recent seed and enterprise capital funds that give the company $950 million more in investment and are “essentially the same size as the funds that we launched six, seven years ago,” Botha said on stage.
Although Sequoia modified its fund structure in 2021 to carry public shares for longer periods, Botha made clear that at its core it is still an early-stage company. He said that over the last twelve months, Sequoia has invested in 20 seed-stage firms, including nine at founding. “There’s nothing more exciting than working with founders early on.” The redwood is “more mammal than reptile,” he continued. “We don’t lay 100 eggs and see what happens. We have a small number of offspring, like mammals, and then they need to be given a lot of attention.”
It’s an experience-based strategy, he said. “Over the last 20 to 25 years, 50% of the times we have made seed or venture investments, we have not fully recovered the capital, which is humiliating.” After his first full write-off, Botha said he cried at a partners’ meeting out of shame and embarrassment. “But unfortunately this is part of what we have to do to become outliers.”
What accounts for Sequoia’s success? After all, many firms invest in seed-stage firms. Botha attributes some of the credit to a decision-making process that surprised him even when he joined two a long time ago: every investment requires partnership consensus, and each partner’s voice carries equal weight no matter seniority or title.
He explained that every Monday, the company begins partner meetings with an anonymous survey to learn a variety of opinions about the materials that partners are expected to read during the weekend. Side conversations are prohibited. “The last thing you want is to create alliances,” Botha said. “Our goal is great investment decisions.”
The process can test patience – Botha once spent six months lobbying partners on a single development investment – but he believes it is essential. “No one, not even me, can force investment into our partnership.”
Despite Sequoia’s success, or perhaps because of it, Botha’s most provocative stance is that enterprise capital is not an asset class, or at least should not be treated as one. “If we exclude the 20 or so largest enterprise firms from the industry results, we [as an industry] he actually underperformed in index fund investing,” he stated dispassionately on stage. He pointed to the 3,000 venture capital firms currently operating in America alone, three times the number when Botha joined Sequoia. “Putting extra money into Silicon Valley doesn’t produce more great firms,” he said. “It actually makes it weaker. It actually makes it harder for us to develop a small variety of special businesses.”
The solution, he says, is to remain small, stay focused and do not forget that “there are only so many companies that matter.” It’s a philosophy that has served Sequoia for a long time. And at a time when Uncle Sam wants capital on your table and VCs are throwing money at every little thing that moves, this will be the most contradictory advice of all.