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Sequoia Partner Hates Tourist Chumps
Roelof Botha thinks history is repeating itself in SPV land.

This newsletter is going to be just like the workout I did this week: Short. Oddly timed. Harder than it should be. But technically it counts towards my weekly streak. Happy weekend!
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🤯
— Roelof Botha (@roelofbotha)
10:16 PM • Feb 27, 2025
First of all, there’s something about this that just comes off wrong. I can’t tell if it’s whiny or harsh in the wrong way or some other sort of off-putting something. I generally kind of assumed Botha would be more articulate than this. I think he is and this was just a weak moment.
“Tourist Chumps” and a head exploding emoji? You were publishing love letters to SBF 3 years ago and now you’re in deep with a non-profit (OpenAI) that is arguably the biggest driver of these types of SPVs in the market. Come on now.
The bigger point here that my meme tries to make and that I’ll elaborate on a bit here is that firms like Sequoia are the reason these “tourist chump” SPVs exist in the first place. If Sequoia (and mega funds like it) capped their fund size (a la USV) and “startups” actually had to go public - this dynamic wouldn’t exist.
A lot of the most exciting companies in the world are private and I don’t think Botha is actually surprised at all that people are trying to buy the equity by any means necessary. So what’s with the tweet?
I think Botha is losing deals to firms with SPVs that are willing to overpay. I don’t disagree that it’s probably a sign of some overheating in the market, but I don’t think name-calling is really helps anyone.
Talk soon,
Adam