The fundamental issue is building a large sustainable company is nearly impossible. You could come up with an amazing product only to have your margins reduced by those that control distribution (like app stores). Or be outright copied by bigger players who give away your product (see microsoft teams and slack). Or maybe a new tech kills what you spent years building (see chegg). And with investors wanting constant growth in a startup’s financial numbers, there isn’t room for long term innovation. The time from founding to going public is very long now. And VCs have a short term focus that is not helpful. Many of these companies are grown to a point only to be dumped on public markets because they know they can’t keep the growth going.

All of this adds up to an asset class that has more risk than expected with less return than expected. VCs may have thrived in a world of easy capital and inflated valuations, but the “reality” is more apparent now. What founders need is an alternative source and model of capital entirely. And regulation to rein in megacorps so competition can thrive freely.