Why Venture Capital Doesn’t Build the Things We Need

In the 1950s and ’60s, technology took us to space. In the 1980s and ’90s, technology helped spread democracy. Now our national mission was … to be able to never leave the house?

Zoom helps us work remotely, DoorDash keeps us fed, and Netflix gives us something to watch. But where was the Covid-19 cure, or the better protective gear, and why hadn’t venture capital—the financial engine of innovation—funded those ideas?

Carol Dahl, executive director of the Lemelson Foundation, which supports inventors and entrepreneurs building physical products, says in the United States 75% of venture capital goes to software. Some 5 to 10% goes to biotech: a tiny handful of venture capitalists have mastered the longer art of building a biotech company. The other sliver goes to everything else—“transportation, sanitation, health care.” To fund a complete system of innovation, we need to think about “not only the downstream invention itself, but what preceded it,” Dahl says. “Not only inspiring people who want to invent, but thinking about the way products reach us through companies.”

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