The VC industry needs to rip up the playbook and start again

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The boom is over but Silicon Valley’s optimism is masking problems with investor capital and returns

The writer is founder of Sifted, an FT-backed site about European start-ups In these grim times, the world could do with a shot of hope. Right on cue, up pops the irrepressible venture capitalist Marc Andreessen to shout about his latest techno-optimist manifesto. “Give us a real world problem, and we can invent technology that will solve it,” the co-founder of Andreessen Horowitz wrote this week.

This capital-as-a-strategy model, prioritising revenue growth over cash or profit generation, is a lot harder to make work now that money costs something. When Brian Chesky, Airbnb’s co-founder, visited the FT recently, he acknowledged that his company would never have been able to follow its growth strategy of the 2010s today. The permissive regulatory environment in the US has tightened, too.

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