Only if you invest in startups they way you play craps. The statistical distribution of outcomes is not predictive of the chances of a particular startup succeeding or failing. Some founding teams are virtually guaranteed to fail; some have a better than even chance to succeed. If you are willing to give up on the unicorns you can also eliminate most of the duds. Valley VCs are not willing to do that.
Venture capital firms aren't competing for "unicorns" simply out of vanity. They need to bet on firms with outsized returns because even in a cohort of pedigreed startups with plausible business plans and some degree of traction, most are going to fail.
Many of those failures are capable of generating reasonable incomes for employees and founders for years, but those incomes are not proxies for investment returns. That's another reason crowdfunding is dangerous: we have a skewed idea of "success", because to us, starting a company that lets us control our own destiny, build our resume, and earn a competitive salary for 10 years is a huge success. To a crowdfunding investor, the returns to investors are the only thing that matters.
That's part of my point. The current VC model causes failures of businesses that are viable going concerns, but not growing fast enough. They know they can make more overall by pushing a subset of those business to explode at the cost of killing most of the others. This also allows them to increase the velocity of their investments, further pressuring their startups to grow or fail fast. Their "cohort of pedigreed startups with plausible business plans and some degree of traction" should yield enough moderate successes to make investment profitable, as long as they are willing to play the long game.
Also, those incomes become proxies for investment returns once the company is stable enough to start paying distributions to its owners. Again, though, that ties up capital for the long term, which is anathema to the current VC crowd.
There is in fact very little value of a "going concern" to outside investors. These "going concerns" are successes for people directly involved, but are not successes for investors. Consider that distributions are the normal way partners and LLC members get paid, and also a huge source of lawsuits, because when management is just a small fraction of ownership, their incentives are to minimize distributions.
You will find few people on HN more pro-boostrap and anti-VC than me. My last company bootstrapped and ran 10+ years. We're bootstrapping this one. I agree with everything Pinboard says about investment versus funding from customer revenue.
But those arguments only have merit as long as you aren't taking outside money to build the business. As soon as you take outside money, your business plan must make sense to the investors.
Would locking in dividends in the business plan allow the investors to become "directly involved" and make investment in a "going concern but not a unicorn" a rational choice for an investor?