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One of Sequoia ’s most prominent investors , managing partner Roelof Botha , image signs of another greed hertz brewing in speculation capital , one where the least advanced investor will in all likelihood get the most hurt .
He posted awarning on Xon Thursday , written material , “ We remain designate to repeat the fault of the past tense ! SPVs are making a come - back , where the lead investor speaks for less than 10 % of the capital , yet thirstily delineate up the late set of tourist chumps who think the story will end differently this time . It ’s only been 3 class . ” ( He punctuate the Charles William Post with an exploding - head emoji . )
That last oscillation ended bad . In 2022 , the overheated VC mart of 2021 break apart . The fallout is still ongoing , with2025 expected to be another brutal twelvemonth of failed startup .
Botha is specifically admonish about limited purpose vehicle ( SPVs ) — a structure that permit a inauguration ’s investor to sell access to a chunk of their shares to others . But the new investor are not actually buying shares in the inauguration ; they are buyingshares of the SPV , often at greatly inflated price . That mean the inauguration ’s valuation would have to soar upwards just for some of the SPV share owners to separate even .
SPVs are becoming especially common in AI investment , where some startups are raising astronomical amount . A hunt of SEC filings finds atleast nine SPVstied to Anthropic since 2024 alone . The company is reportedly in talks to raise another$3.5 billion .
digit AI ’s attack to raise $ 1.5 billion is also reportedly full of SPVs , perthe Information . Note that neither caller is in Sequoia ’s portfolio .
The vogue is n’t restrain to just a few company . closely every major multi - billion - buck AI troupe has investors offering SPVs . And if a bighearted - name VC firm firm — say , Sequoia ’s archrival Andreessen Horowitz — is lead the heap , that name alone can tempt in buyers .
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One person regard in the secondary markets draw SPV - loaded deals like this : “ They are turn over the chapeau on all the peck that ca n’t find enough VC investors and the name firm puts up a flyspeck amount and these dazed family office say oh , ‘ Andreessen is leading it must be honest , ’ even though we know that these are their spoiled company that ca n’t raise money from traditional VCs . ”
Botha ’s message to these would - be investor ? “ Do n’t buy it . ”
Sequoia did not immediately answer to a asking for further comment .
