We can’t rely on venture capital to fuel moonshot innovation
For investors, fighting climate change or disease will not have the immediate link to profitability that let’s say, urbanization had. When Western nations needed to alleviate rural poverty, urbanization was a solution, and private capital was readily available to finance the industrial revolution. The free market was in this instance, pareto efficient. Society had a problem, and privateers profited from fixing it.
But in today’s VC landscape, this isn’t the case. There is a disconnect between immediate profitability and societal needs — for example, fighting climate change, shoring up the food supply, or fighting fake news increases. The need for solutions to these issues is becoming increasingly urgent, yet private investors still flock to larger rounds for later-stage, profitable businesses, preferably future monopolies.