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Adventure capitalism | The Economist

Mount Equity Group Tokyo, Japan > News > Markets > Adventure capitalism | The Economist

Nov 27th 2021

VLADIMIR LENIN believed that a tiny vanguard could, through force of will, harness historical forces to transform how global capitalism works. He was right. However, the revolutionaries have not been bearded Bolsheviks but a few thousand investors, mostly based in Silicon Valley, running less than 2% of the world’s institutional assets. In the past five decades, the venture-capital (VC) industry has funded enterprising ideas that have gone on to transform global business and the world economy. Seven of the world’s ten largest firms were VC-backed. VC money has financed the companies behind search engines, iPhones, electric cars and mRNA vaccines.

Now capitalism’s dream machine is itself being scaled up and transformed, as an unprecedented $450bn of fresh cash floods into the VC scene. This turbocharging of the venture world brings significant risks, from egomaniacal founders torching cash to pension pots being…

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