Venture capital is more short-termist than what research needs

<p>There is an argument to be made regarding the timeline that <a class="wikilink" href="/venture_capital/">Venture Capital</a> is used to working with. Investment funds have a lifetime of around 10 years, and they aim at recovering their investments in a shorter amount of time, so they can move on to the next fund. </p> <p>In most investment rounds I've been involved, I have seen milestones projecting a next round in around 3 to 4 years, and this is quite aligned with what [[literature/<a class="litnote tooltip" href="/literature/@mazzucato2018">@mazzucato2018<span class="tooltiptext">The entrepreneurial state: debunking public vs. private sector myths</span></a>|<a class="litnote tooltip" href="/literature/@mazzucato2018">@mazzucato2018<span class="tooltiptext">The entrepreneurial state: debunking public vs. private sector myths</span></a>]] reports. I don't have proper statistical data, but there's a feeling that it is a valid observation. </p> <p>In that case, one can wonder whether the way VC is currently structured can sustain investments in <strong>research</strong>. A PhD project is longer than 3 years (except in countries like <strong>France</strong>), which then I wonder if this may be the reason. </p> <p>Can proper research be conducted in less than 4 years? I think only if we focus on those projects that survive, and that started off with enough momentum. However, across the board, I think it is highly unlikely that a company with a seed round can push through a proper research cycle, considering the high degree of isolation and startup costs associated with labs and infrastructure. </p> <p>Companies that need to focus on research (and not just on development) before going to market, will struggle dealing with <a class="wikilink" href="/venture_capitalists/">venture capitalists</a>. Then, the question of whether they should live off subsidies from the state, or just disappear and let publicly funded institutions do the groundwork is a different story (see: <a class="wikilink" href="/202311280955_socialize_risks_and_privatize_rewards/">202311280955 Socialize risks and privatize rewards</a>).</p>