For the reason that our fishing-net, the arbitrage we have deployed to discover innovation, is systematically incompatible with catching outliers. Subprime risk propagated by the overwhelming collusion of venture capital can only attract subprime innovation by design, quite the opposite of the risk profile needed to support outliers who can reinvent our world anew.
Amplified by Einstein’s words:
“The thesis determines what can be discovered”.
We need the antithesis of today’s venture capital, in which the innovation in question determines the financial instrument to support unprecedented outlier value. Great ideas are aplenty, great investors, not so much.
