Twelve years ago at the blog — a rare double post day on the growth fetish.

This post is by Unknown from West Coast Stat Views (on Observational Epidemiology and more)

Of course, the 2012 me had no idea what kind of VC-driven insanity the 2024 me would witness.

Thursday, March 22, 2012

Venture capital and the growth fetish

Felix Salmon has another smart post on venture capital and the way he feels it distorts American business:
Another way to look at this question is to compare US fight-to-be-number-one capitalism with the kind of capitalism practiced in undeniably successful countries like Germany, Korea, Brazil, and Japan. Those countries don’t have nearly as many world-beating behemoths as the US does, but overall their economies and current accounts are doing very well on a bedrock of medium-sized firms and family-owned corporations.

So in a way, Gobry is making my point for me. The IPO market and the VCs who feed off it are playing a game which might make a small number of people extremely rich, and which will create a very small number of hugely successful world-beating companies. They’re not playing a game which is good for founders; they’re not playing a game which is good for healthy, long-lived companies; and they’re not playing a game which is good for the economy as a whole. That’s kind of the point I’m making in the piece when I say that “Silicon Valley is full of venture capitalists who have become dynastically wealthy off the backs of companies that no longer exist”.
I think this fits nicely with one of our ongoing themes here at OE, the growth fetish:
Think of it this (Read more…)