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VC funded companies are into the trillions of total investment (100+B / year adds up). That’s a small but meaningful fraction of global wealth for such a tiny
by Retric 2y ago
VC funded companies are into the trillions of total investment (100+B / year adds up). That’s a small but meaningful fraction of global wealth for such a tiny slice of companies. It’s not that these are necessarily bad investments, but growth at any cost tends to suck up a lot more talent than the business actually justifies.
Of course the industry is mostly dumb investments. Looking back Google+ was part of a wave of social websites that didn’t really go anywhere. Facebook was founded in 04, Twitter in 06, but in 2011 suddenly everyone wants in on the action… The wave of crypto was similarly almost pure waste but most VC firms aren’t really about wise investment. It’s about charging high fees for funds under managed, they succeed when someone invests not when companies become profitable.
- edanm 2y agoYeah, they're into trillions, but aren't they like 5% of most pension funds, which are the biggest stores of wealth? Also, if you're looking at trillions invested, I'd hardly call them startups or speculative investments. It's certainly true that something like OpenAI or Uber spent (and still spend?) many years without making profit, but by the time they're raising rounds of billions, it's no longer anywhere near the same level of risk, and the statistic that "most fail" rings less true.
- carlosjobim 2y agoIt's speculative until there's a steady stream of profits paid out to investors. I wouldn't say that the size of the investment or of the business makes any difference in that aspect.