Roelof Botha, managing partner at Sequoia, warns that venture capital is repeating past mistakes with the resurgence of special purpose vehicles (SPVs). He highlights that inexperienced investors are drawn in by hype, potentially facing losses as these SPVs allow access to startup shares at inflated prices without actual ownership in the companies. Botha emphasizes that the overheated VC market of 2021 has not fully recovered, predicting that 2025 will see further fallout from this risky trend, particularly in AI investments where SPVs are prevalent.
"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..."
"The trend isn't limited to just a few companies. Nearly every major multi-billion AI company has investors offering SPVs..."
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