| This discussion and the points being made are totally valid and reasonable. But I think there's one thing they completely miss, which is the cultural impact of VC. Given the massive success of software companies over the past decade or two, hordes of driven, talented, and smart young people have joined VC-backed companies or aspire to do so. It's become culturally accepted that if you're an ambitious person, you should be working at - or better yet, founding - a venture-backed company. The societal opportunity costs of this phenomenon are significant. I know dozens of young, talented people who are founding companies for no particular reason, simply because it's become the default path for what they're supposed to aspire to. Is this the "fault" of venture capital? Not really - VCs are just trying to attract talented founders and make their portfolio companies successful. But by doing so, they've created a negative externality, which is that VC has become the gatekeeper of perceived "success." That means fewer talented, high-energy people working in government institutions or critical industries - precisely where those talented people could have the greatest impact on society at large. |
From talking to friends and younger people entering the workforce, this is almost always the bigger consideration. Most feel like starting a company is still a total shot in the dark from a success standpoint, and I feel like there is more skepticism than ever of the startup lottery.
What I totally agree with is that VCs need to be doing a much better job telling people that starting a VC-backed company is an extraordinarily bad way to make a lot of money. The odds are just insanely stacked against you. That said, most people gravitate to inspirational stories even if you're told it's at odds with what you can expect for your own journey, so, the more of these success stories there are (even if the ratio of them relative to total "tries" stays consistent), the more people will take the startup path.