February 1, 2025
Moving fast and breaking things. At some point, the tech sector became Big Tech, much of it fueled by arrogance, elitism, and greed. A civic technologist and community organizer, Bracy sees the villain in this dynamic as venture capital firms that invest in companies that rush for "breakneck" growth and market share rather than build a solid structure--a process known as "blitzscaling." Only a small percentage of startups--and the VC firms that fund them--prosper, but the overall returns can be spectacular. This has led to the VC methodology spreading into business sectors that, says Bracy, are simply not appropriate for them and instead need patient capital to provide a steady growth path. She cites research showing that the VC sector, rather than fostering innovation, destroys more value than it creates. Some entrepreneurs have looked beyond the usual VC providers for funding and have successfully worked with philanthropic foundations and similar organizations. Bracy suggests that corporate regulators should examine the VC sector, which has so far escaped serious attention--while venture capital "might not be as systematically important as investment banking," she writes, "it certainly holds outsized sway in the economy overall." Largely free of jargon, Bracy's study adds up to an important analysis that's supported by some useful ideas. "For innovation to thrive," she writes, "we need venture capitalists to prioritize the pursuit of breakthroughs rather than the pursuit of windfalls." Bracy concludes with some advice for startup entrepreneurs: "Don't give up," she writes. "Don't listen to investors who tell you your ideas aren't big enough or who try to shake your conviction in the solutions you are building....We need your ingenuity and bravery now more than ever." An informative look at an industry that values "hyper maximalist growth at breakneck pace."
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