[labcomputer]

> Why should they get ownership of the business? When you get a mortgage for your house, the bank doesn’t permanently own part of your house after you pay it off.

Because the VCs are funding the startup on extremely favorable terms?

If the startup fails, the founders can just walk away. They are not personally liable for anything. They can (and often do) subsequently form another startup, often funded by the very same VCs who funded the one that just failed!

If, OTOH, you fail to pay your mortgage, the bank takes your house. And they make hard for you to get another mortgage from any bank by reporting the foreclosure to credit ratings agencies.

You absolutely can keep the equity (and surplus) for yourself… but you will need to personally guarantee the loan. You may need to declare bankruptcy if the startup fails, and all that entails.

VCs are happy to throw away money on 99 failed startups precisely because they are entitled to the continued surplus from 1 successful startup. Banks are happy to make failure to pay extremely unpleasant for you because they are not entitled to any surplus from business loans which lead to successful outcomes.

[yogurt-male]

> VCs are happy to throw away money on 99 failed startups precisely because they are entitled to the continued surplus from 1 successful startup.

And why is this a good thing? I think the past decade and the current bubble point to this being a bug, not a feature. What I mean to say is that VCs seem far too eager to throw money at ventures with untenable business plans or that lack any edge over competing firms, which is a waste.

[labcomputer]

> And why is this a good thing?

Ok, well, I personally really like driving a car with zero tailpipe emissions, and the cleaner air that comes from it (Tesla).

I think it’s awesome having a little rectangle in my pocket that sends text messages from anywhere on earth and summons an encyclopedia (Apple, Google, Starlink, Intel).

I enjoy talking to (and seeing) my friends and family while they are thousands of miles away (Cisco, Apple, and many others).

I think it is fantastic that we continue to find new labor-saving methods of farming so that fewer people need toil in the fields (the current batch of ag-drone and ag-AI startups).

This is like asking “well, why do we need that science mumbo jumbo anyhow?”

[zanellato19]

Claiming that all of these would not exist without VC is hard to believe.

[fluoridation]

What do you mean "a bug"? A bug in what? If to someone it makes sense to pour money into an apparently non-viable business on the off chance that it succeeds, what exactly is it that you're saying is not functioning properly? The person's mind? So what do you want to do about it?

[immibis]

You're only reacting to a part of the system. You're starting from the axiom that businesses need a level of risky funding that only VCs will provide, and then congratulating VCs for swooping in and saving the day. But would it be possible to have a system where startups to require less funding? For example, by UBI, or normalizing bootstrapping?

[fluoridation]

Sorry, but your reply is so utterly disconnected from my question that I'm just going to assume you replied to me by mistake and ignore it. If it wasn't a mistake then you've completely missed the point.

[immibis]

You said this: "If to someone it makes sense to pour money into an apparently non-viable business on the off chance that it succeeds, what exactly is it that you're saying is not functioning properly?"

But this comment only makes sense when starting from a whole bunch of assumptions, which happen to be true right here and now, but are in no way universal.

Let me make a comparison: "If to someone it makes sense to carry a flamethrower to the grocery store to defend against thieves, what exactly is wrong with that?" What's wrong is a society where that kind of defense is necessary! We shouldn't be debating whether the individual should carry a flamethrower to the grocery store, we should be discussing how to improve society so they don't have to.

Also, rich people don't get to create a problem and also claim credit for solving it (with money).

Edit: much better analogy.

[fluoridation]

>Let me make a comparison: Me: "People should be able to walk to work" You: "If someone can't walk 10 miles to work along the side of a road with cars whizzing by at 100mph, why should they be able to walk to work?"

Yeah, like I said, you completely missed the point of my comment. Here, let me fix the analogy for you:

A: The fact that people drive cars on roads is a bug, not a feature.

B: A bug where? Like, in people's minds for thinking that driving cars on roads is a practical mode of transportation?

C: People should be able to walk to work.

Do you see how C's reply to B is a non sequitur? It doesn't answer the question that was posed, it presents an irrelevant "should", and even if one is generous enough to grant that people should be able to walk to work, it doesn't make choosing to drive cars on roads for other purposes an irrational decision. And, and, it most certainly doesn't make it irrational in the world we actually live in.

EDIT:

>We shouldn't be debating whether the individual should carry a flamethrower to the grocery store, we should be discussing how to improve society so they don't have to.

I don't appreciate being told what is or isn't okay to talk about.

[immibis]

What if we created a system where startups didn't require as much funding? Is the system set up in such a funding-intensive way in order to benefit VCs, who can swoop in and save the day? If so, rich people don't get any credit for solving a problem rich people created.