I've been pointing out for more than 20 years that so many portfolio failures are a direct and ineluctable consequence of a fundamentally broken model. In the old days, VCs (for all their many faults) had at least started or run companies or divisions. They had a grasp of reality. Today's VCs are mostly boys & girls who emerged from MBA school without ever having done anything; thus they live on hype, follow the herd ("if every other firm is investing in X-type companies we'd better invest in an X-type company too!"), and seem oblivious to the fact that they have almost no ability to understand what they are doing. It's like Hollywood: no one has a clue. And like Hollywood, the dream is that the occasional blockbuster will cover the costs of the myriad failures. It's a broken model and ensures that hype-oriented companies will be funded while potentially great companies will be ignored "because they don't fit the (illusory) hockey-stick model."

Anyone who enjoys my articles here on Medium may be interested in my books Why Democracy Failed and The Praying Ape, both available from Amazon.

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