Because venture capital has turned predominantly subprime, by its uniform micro-private-equity risk profile deployed in the hopes of detecting non-uniform outliers of innovation. An incompatible risk-in risk-out profile guaranteed to yield poor outcomes.
Hence by deploying deflated and delayed risk of subprime, the chances of producing prime venture-style returns have significantly diminished. A subprime risk profile can, by principle, only attract subprime innovation. And wearing the ugly spectacles of subprime, VCs get grumpy from the mind-numbing work of having to weed through the fog of subprime deals in an ill-fated attempt to find the improbable diamond in the rough of prime.
Using the wisdom of Albert Einstein: The risk profile determines what can be discovered.
Only prime risk can successfully pursue prime innovation that produces renewable socioeconomic value. And many a venture capitalist now have painfully come to find out that a mere business degree with buckets of money to spend does not make one a better venture capital investor than a person right off the street who has lived a life of prime risk.
Let’s refer to this debacle as the inevitable natural selection of investors by risk atrophy. They were warned, by me, a long time ago.
