Innovation arbitrage, by excessive deal collusion, deal fragmentation, and evolutionary ignorance, on the whole, has deflated the risk profile of innovation, leading venture capital through their self-induced structure systemically unable to discover unprecedented outliers of innovation.
For a fishing net of sub-priming is unlikely or lucky to catch prime. Or inversely, in the words of Einstein, the thesis of venture capital determines what innovation can be discovered.
Their eroded and mindnumbing thesis is the reason why no VC spotted the opportunity for, say, Tesla until it showed up ballooning in their rearview mirror. Also, the reason why despite many desperate changes to the investment premise of venture capital over many years, so many fail (>99%) to produce socioeconomic value the world actually (still) cares about.
The best thing a VC can do is to align the risk-profile of other people’s money (OPM) with the unprecedented foresight of upside developed by an entrepreneur timely, ready, and able to change the world. And then, like a parent, catch entrepreneurs when they inevitable trip over the minor aberrations along the treacherous path towards new and better world order.
The proof in the pudding of what a VC does best is in the evolutionary value of the companies they support. Send me their names and I will gladly give you my report card of what they actually do best.