Good of humanity is not for good of venture capitalist
2022.12.22 00:57
Good of humanity is not for good of venture capitalist
Budrigannews.com – The total market capitalization of cryptocurrencies reached nearly $3 trillion in 2021, roughly the same as Africa’s economic output. A record $630 billion filled funding ventures that year. Money that was intended for innovation is being redirected right now as interest rate hikes destroy alternative assets.
According to a report from CBInsights, global venture capital funding decreased by 27% year-over-year to $329 billion in the nine months ending September 2022. The liquidity crunch revealed shortcomings in governance, stupid ideas, and solutions seeking problems: flying automobiles, non-fungible images of bored apes, and metaverses. It’s possible that other concepts that appeared to be close to commercialization were not.
For instance, in October, Ford Motor (F.N.) disbanded its self-driving car division due to concerns regarding the speed at which vehicles will learn to drive and park themselves to the satisfaction of regulators and insurance companies. In other areas, progress is slowing down, like in semiconductors.
The new buzzword is “hard tech,” which refers to a number of fields that have traditionally been dominated by corporate labs within industrial giants like Applied Materials (AMAT.O), a manufacturer of chip equipment in the United States.
Compared to consumer app games, which many Silicon Valley backers are accustomed to, designing microscopic robots to combat disease and biochemical computers that outperform silicon chips comes with higher initial costs and longer commercialization cycles. According to Preqin data, in the last ten years, for every VC dollar invested in nanotechnology startups attempting to manipulate matter at the near-atomic scale, $44 went into fintech.
It is past due for a change. Even though global patent filings continue roughly at the same rate, there are signs that the exponential growth in human output and lifespans that began with the industrial revolution in 1760 is gradually flattening out in wealthy nations.
It is remarkable that the life expectancy of its citizens has begun to decrease while U.S. research and development continues to outperform. The research’s erroneous direction and uneven distribution of its results may be one factor.
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At the same time, average quarterly VC deal values increased from less than $10 billion to $178 billion by the end of 2021 as a result of the ultra-low interest rate environment created in response to the global financial crisis of 2008. Poor insurers and pension plans were encouraged to invest in speculative businesses like the failed crypto exchange FTX by low yields on conventional investments.
It is hoped that rising interest rates will redirect some or all of that capital toward actual issues, resulting in significant benefits for output and health. Everyone will just have to wait a little bit longer to cash out. The rational capitalist will anticipate a less frivolous time.
