Yeah, well, every investor would rather invest in a "legitimate" startup, and every engineer would rather work for one. But telling which is which is the tricky part, isn't it? Some things are only obvious in retrospect.
While true, that's beside the point at hand. The author is suggesting that the VC system is consciously selecting for the Colors of the world -- or, at the very least, that it has created conditions conducive to the next Color.
In other words: it's not simply betting at the track and ending up with the wrong horse. It's actively betting on what it knows to be the wrong horse, because the wrong horse pays off in the short term.
In other words: it's not simply betting at the track and ending up with the wrong horse. It's actively betting on what it knows to be the wrong horse, because the wrong horse pays off in the short term.