VCs see market disruption as an opportunity to invest in businesses that can take advantage of the change to seize a chunk of market share. When a bunch of tra

VCs see market disruption as an opportunity to invest in businesses that can take advantage of the change to seize a chunk of market share. When a bunch of trading barriers appear, cutting off players from participation in a market, startup opportunities will abound - that’s not surprising. Similarly, an epidemic of window-smashing might see record VC investment in window repair startups - that hardly refutes the broken window fallacy. The signal that is ‘increased investment activity’ doesn’t necessarily point to economic health.