This is damning data, proving that the "startup revolution" of the past 20 years and of the Valley is a fraud. Of course, many of us already knew this, but it's nice to see data that proves our point.
The main role of the VCs, at this point, is not to empower companies but to fund the competition (an extortion dynamic: "take our terms or we throw 'rocket fuel' to your competitors, who might crash and burn but will take you down before they do"). Subtle distinction. Management-wise, VCs take away far more than they add. The money (ahem, other peoples' money) that they infuse should be a commodity, but they're going to fight as hard as they can to make it not so. Thus, they've created a "startup" economy in which they:
* Build crappy "throwaway" companies not built to last, with the hope
that one will latch on to a genuine new technical idea and go 100x.
* Increase the entrepreneurial activity of one sector, slightly,
in one location while draining the rest of the country and society.
Also, the power of the VC oligarchy is enhanced by the fact that bank loans (the traditional way of starting a business) are completely broken at this point. Getting a bank loan requires personal liability, which makes it a non-starter for anything that might actually fail.
Business is becoming a generational aristocracy at this point. You don't need to look any further than the absurd propping-up of boy kings Lucas Duplan and Evan Speigel. (They even look like Joffrey Baratheon!) I don't have any prima facie dislike for capitalism. In fact, it's a necessary core component of any advanced society. But corporate capitalism is a dinosaur and it's time to go Yucatan on its ass.
I love that I can tell the author of a comment by the end of the first sentence =)
Spot on, though. I would take a bit issue with your last point: imagining a good capitalism and a bad capitalism, and saying the issue is just we just got dealt a bad capitalism, is strikingly similar to socialists who say the same about the USSR--"but that wasn't real socialism!" Especially since many people approve of capitalism as it exists today and would argue that this is how it's supposed to be.
I'd also question terming it a dinosaur. The distinguishing characteristic of corporate capitalism is an amazing ability to adapt, survive, co-opt possible threats, and shift costs onto individuals outside the system. It's the most robust creature on the planet right now.
VCs and the entrepreneurs who work with them have made themselves wealthy in large part through starting companies which ultimately get acquired. This includes many of their investments that IPO but get acquired later on.
This situation does not seem to me to be incompatible with the dominance of older firms discussed in the article - the ones doing most of the acquiring.
The main role of the VCs, at this point, is not to empower companies but to fund the competition (an extortion dynamic: "take our terms or we throw 'rocket fuel' to your competitors, who might crash and burn but will take you down before they do"). Subtle distinction. Management-wise, VCs take away far more than they add. The money (ahem, other peoples' money) that they infuse should be a commodity, but they're going to fight as hard as they can to make it not so. Thus, they've created a "startup" economy in which they:
Also, the power of the VC oligarchy is enhanced by the fact that bank loans (the traditional way of starting a business) are completely broken at this point. Getting a bank loan requires personal liability, which makes it a non-starter for anything that might actually fail.Business is becoming a generational aristocracy at this point. You don't need to look any further than the absurd propping-up of boy kings Lucas Duplan and Evan Speigel. (They even look like Joffrey Baratheon!) I don't have any prima facie dislike for capitalism. In fact, it's a necessary core component of any advanced society. But corporate capitalism is a dinosaur and it's time to go Yucatan on its ass.