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I don't think it squares with the VC industry - but the VC industry is just one way of moving money from those that have money but cannot build new wealth, to t

I don't think it squares with the VC industry - but the VC industry is just one way of moving money from those that have money but cannot build new wealth, to those that have talent but no money. The initial move from talent to profitable business is what we need - not because we can see a runway to 18 months IPO but because what the duck else do you do with money other than create new better wealth for the world. Previously this has been solved by government taxing rich and giving it to innovators through schools, universities and arms spending (simplifying slightly). But apparently tax is bad now, and governments don't know how to pick winners to VCs are going to take over. If this is not a great idea we should try some other options - the OP has an idea. It's not bad. Others exist (including that tax one which apparently no one with money likes)

layer8 4y ago
But VCs aren’t a charity issuing the equivalent of bank loans. They hope for substantial ROI (enough to offset all the failing investments), which isn’t very compatible with the non-accelerated-growth non-IPO Mittelstand model.
- lifeisstillgood 4y ago
  Yeah - which is why I don't think the VC industry as it is currently formulated is the right vehicle to do the next leg of the journey. But that's ok. We don't have to stick with the current formula - other options exist in the phase space. We don't want to throw out the fanta aston growth of the past 200 years, but we do want to ... fine tune it to provide similar benefits, at different social costs/benefits. From a longer term perspective, the VC money is not "theirs" - this is an investment in the future of the species. I think there are three questions 1. How do we discover fundamental breakthroughs (steam turbines, E=mc2, new drugs). Tax funded edication and universities is mostly the answer (R&D labs at companies so big they look like government departments also help). I think we could double the science budget in every western country every five years for decades before hitting some negative feedbacks 2. How to build out the skeletons of these breakthroughs (ie when we got electricity in the 1900s the question was how to build wires to every house. Yes the initial rush was privately funded but that was about two blocks of NYC. The continent wide rollout was ... tax funded. How will we move from oil and gas to (Inpresume) solar. It will need more wires, different home and industry power plants (gas boilers etc). 3. finally the foam on top - the tech startups etc. How to encourage these - speed them up, have them deliver different social and industry outcomes. my take is to stop doing what we currently do, which give us the current outcomes (oh look another MIT graduate being asked to scale for growth) and find different founders in different places. I think YC itself is trying to answer many of these questions - they have pushed out to fund startups outside USA, they are choosing outside the SaaS window and are looking at fundamental ideas (fusion startups!). But honestly compared to (effective) government funding they are a drop in the ocean. but it seems they point in the direction Inwoukd too.

layer8 4y ago

But VCs aren’t a charity issuing the equivalent of bank loans. They hope for substantial ROI (enough to offset all the failing investments), which isn’t very compatible with the non-accelerated-growth non-IPO Mittelstand model.

lifeisstillgood 4y ago
Yeah - which is why I don't think the VC industry as it is currently formulated is the right vehicle to do the next leg of the journey. But that's ok. We don't have to stick with the current formula - other options exist in the phase space. We don't want to throw out the fanta aston growth of the past 200 years, but we do want to ... fine tune it to provide similar benefits, at different social costs/benefits. From a longer term perspective, the VC money is not "theirs" - this is an investment in the future of the species. I think there are three questions 1. How do we discover fundamental breakthroughs (steam turbines, E=mc2, new drugs). Tax funded edication and universities is mostly the answer (R&D labs at companies so big they look like government departments also help). I think we could double the science budget in every western country every five years for decades before hitting some negative feedbacks 2. How to build out the skeletons of these breakthroughs (ie when we got electricity in the 1900s the question was how to build wires to every house. Yes the initial rush was privately funded but that was about two blocks of NYC. The continent wide rollout was ... tax funded. How will we move from oil and gas to (Inpresume) solar. It will need more wires, different home and industry power plants (gas boilers etc). 3. finally the foam on top - the tech startups etc. How to encourage these - speed them up, have them deliver different social and industry outcomes. my take is to stop doing what we currently do, which give us the current outcomes (oh look another MIT graduate being asked to scale for growth) and find different founders in different places. I think YC itself is trying to answer many of these questions - they have pushed out to fund startups outside USA, they are choosing outside the SaaS window and are looking at fundamental ideas (fusion startups!). But honestly compared to (effective) government funding they are a drop in the ocean. but it seems they point in the direction Inwoukd too.