Innovation Is Not A Capital Crapshoot

Canadian 2013 Queen Elizabeth II Diamond Jubilee Medal Economist Dr. Reuven Brenner comments on the dismal returns for venture capital in Canada.

With median Canadian VC delivering a 4% internal rate-of-return (IRR) versus comparable US returns of 12% over the last ten years. In his missive, he reasons why he wants a seat at the table defining the policy of innovation, but his reasoning is emblematic of precisely his misunderstanding of innovation.

My comment included in the article states:

“Innovation is not a crapshoot, the way the author describes it. Yet the very definition of innovation has been subprimed by the excessive collusion, deal fragmentation and deal syndication by venture capital as innovation’s arbitrage, turned macro-economically incompatible with finding outliers of innovation to support venture-style returns. There is no reason venture should not be able to outperform 100-year-old asset classes. No reason but a self-inflicted one. One that can and must be resolved, starting with the way venture capital deploys the pursuit of risk. In the words of Einstein, the thesis determines what can be discovered.”

Soon, we will launch a series of brand-new masterclasses in which I will demonstrate how to deploy risk to target innovation outliers tailored to policy-makers, asset managers, and venture capitalists. Stay tuned.

The sign of an intelligent nation is its willingness and ability to reinvent itself, upstream. Let’s inspire the world with new rigors of excellence we first and successfully apply to ourselves.

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