Social Capital Annual Letter 2019

First, most venture capital firms use antiquated business models that prevent them from being able to move quickly, reach scale, and establish strong competitive moats. Most venture firms are built on a partnership model, like law firms.

The second structural problem with the VC industry is that most venture firms are selling a product that is fundamentally an undifferentiated commodity — capital.

Social capital, on the other hand, is harder to define and relies on the creation of a “successful status game.”

With startups acting as determinants of the future, lack of diversity in entrepreneurship trickles downstream into lack of diversity in the broader economy and culture.

The startup ecosystem is experiencing a series of changes that can't be ignored:- cambrian explosion of funding availability- more value is being created on private markets- going from zero to one is no longer a dark art - ie more talented operators, more infrastructure to build quickly and cheaplyChange is coming to the VC ecosystem. Who will win:... See more

In the 1980s, a venture capitalist could truthfully say their investment was the difference between life or death for an important, generational technology company. Funding such companies, in this way, was absolutely a good quest. But today there are more people "helping the builders" than actually building, fighting one another in a zero-sum game

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