| The article is not mentioning that QE flooded the capital markets with money globally. Money which mostly sits idle (they are so desperate that they buy bonds with negative interest rates). This over supply of money and the lack of investment targets, eased raising of money for VCs. More money, more VCs, more funding, more pressure on VCs to deliver returns, less interest in radical new ideas. In other words VCs got an incentive to look for proven business models to invest in. That also explains the success of angel.co. I think the bigger problem is that capital allocation for new startups is broken. There is so much free capital in the market, and only a tiny percentage makes it into startups, globally ca $120bn per year. Compared to trillions of dollars floating free in the markets, that's a drop in the ocean. Venture activity is also concentrated in a few places. It isn't widespread enough. -> capital allocation for new ideas is ineffective and inefficient, the current model of investing isn't sufficient anymore. |