[jlangenauer]

It should be noted that no-one was forced to put their money in a VC fund, so when the author is whining about VC's playing with "other people's money", he's ignoring that those "other people" very deliberately put their money there, for VCs to do exactly what they do.

And if not VCs, then how should capital be allocated to innovation? Soviet-style central planning, where a government department decides who gets investment? EU-style grants, where those most skilled in manipulating the grant system get the money?

And fundamentally, if individuals are allowed to own shares in private companies, then there will always be people willing to make speculative investments with their own money - VC is simply a professionalization and formalization of this.

[bobosha]

well put. It's a flawed system, but the only system that works.