Hi Michael — not sure where is best to discuss, here or Twitter. I’m grateful for the opportunity to debate this, as I’m in the middle of writing a book about VC and Healthcare, and this is a great way for me to sharpen my arguments (or disprove them before I embarrass myself!).

The COVID-19 vaccine example is actually a wonderful example for how the VC model fails VC and fails society. As Chamath Palihapitiya points out, if all VC did was give an equal amount of money to every biotech company launched out of a (publicly funded) research lab, they’d get a 20% IRR. And yet, somehow, Moderna was the most highly valued biotech startup ever …and a constant economic failure while VC drove it to address therapeutics. All of which failed. It was only the $1B or so invested in it by the US Government that enabled it to transition its tech (which was developed in a publicly-funded university) into vaccines that seems to have saved the company. BioNTech is similar: it received around half-a-billion in public aid from the German taxpayer…and leveraged that public investment to profit off the US government’s purchase guarantees.

In other words, in both cases, VC seems to be not only a marginal source of capital for these companies, but often the outsized beneficiary of public investment. At the expense of the public.

Amazon is another great example: one of the most valuable companies on earth, Amazon does employ a lot of people — although one could argue that it employs less people than would have been employed if Amazon did not engage in predatory practices against its own retailers, and that it is largely subsidized by the public by the simple fact that it does not pay taxes on its earnings. Huge financial success to a very small number of people, huge negative externalities to the public.

All of this is to say that ventures need to be financed, and in recognition that innovation does disrupt industries and that disruption takes time to prove its social value, but VC doesn’t seem to drive the outcomes you express concern about in your piece.