
Venture Capital – No, We’re Not Normal - kjhughes
https://medium.com/correlation-ventures/venture-capital-no-were-not-normal-32a26edea7c7
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m0llusk
This is disturbing. Venture Capital has an established record of funding
broken business models that push profitable but low margin establishments out
of business before going belly up themselves. This is antisocial behavior that
does serious damage to markets, yet in this analysis the only considerations
are for maximizing returns on capital. There isn't even any mention of how
much damage this ha ha funny not normal way of doing business does to
traditional commerce. All those golly back to the drawing board scenarios
competed with companies that didn't have explosions of capital to back them
up.

Overall enabling venture capital investment is a positive thing but as always
we need to be realistic, avoid doing harm, and be eternally vigilant lest we
poison our own punch bowl.

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smallgovt
I don't think it's so cut and dry. Many VC-backed businesses implement a
growth-first pricing strategy that undercuts competitors. Some of these
businesses fail and create a net harmful effect (by forcing sustainable
businesses to shut down). But, some of these VC-backed businesses also go on
to be wildly successful and valuable to society (in a way that would have been
impossible without this growth first mentality). Before we call this pricing
pattern antisocial, I'd want to see some thoughtful cost benefit analysis.

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m0llusk
Exactly. Not cut and dry. Open opportunities for cost and benefit analysis.
Instead of only asking what was done and whether operations endure, look
beyond at the larger market. Did competitors respond to competition or
disruption? Are there more or fewer options now available to consumers? Did
the size of the involved markets change? That sort of thing could be extremely
interesting and reveal opportunities but currently gets relatively little
discussion.

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projektfu
Ok, so what's the overall rate of return for venture capital? I don't care if
they hit or don't in the end if they end up winning for investors.

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ncmncm
The investors are not the only parties affected. VC activity imposes a tax on
the society they operate in.

