> What was once a process over which government had visibility is now in the hands of the private sector, with firms that have historically discriminated on age, ethnicity, gender, etc.

That logic would suggest companies shouldn't be allowed to hire non-immigrants without government approval either, since they've historically discriminated against people with non-immigrant hires too. But as far as I know, you're not suggesting you should have to apply to the government to get a job at your local IBM office, because that would be weird. We just make discrimination illegal and hope for the best. Why wouldn't the same logic apply to VCs funding foreigners?

Another problem there is the "we don't have oversight into how fair this will be, so now no one gets it!" which helps no one, including all those people you're trying to protect from discrimination.