In a well argued article in The New Yorker Nathan Heller questions the very core of VC claims. With reference to the book“VC: An American History” by Harvard Business School professor Tom Nicolas (I wrote about this and Fred Wilson’s article on this – post #196 – Whales. Not Unicorns) where the narrative starts with Whaling and its funding in the early 19th century.
We learn about the role taxation, governmental investments and favorable policies played in building the technological wins that spurred the Venture Capital industry and debates the real value it adds to the global innovation economy, Along the way he writes about the colossal failures – Theranos etc and ventures which were built without the VC dime ( Microsoft, Craigslist etc). Inspite of Google, Apple, Netscape, Facebook, Amazon etc – it seems VC actually has little to show in terms of real spread and growth in ventures – for all the glamour and ink it gets.
Nathan concludes – “Subtract venture capital from the landscape of late-twentieth-century innovation, and we would have reached the new millennium with roughly the same technological capabilities.”
That’s telling. And is very much worth a read.
Where I learnt this #397
IS VENTURE CAPITAL WORTH THE RISK?