The VC Model Is Broken for 95% of Startups
Mike Smith
Spicy Level
The Take
VC funding is optimized for unicorn outcomes. 95% of good businesses aren't unicorns. The result: founders twist viable businesses into unicorn-shaped distortions that explode under the pressure.
+Why I'm Right
Most VC-backed startups fail despite being viable businesses at smaller scale
The pressure to grow 10x forces unsustainable spending
Alternative funding (revenue-based, crowdfunding) produces better outcomes for most
AI reduces capital needs, making VC even less necessary
?The Counter-Argument
“For genuinely winner-take-all markets, VC remains the right model. Not every startup should raise, but the ones that should would die without it. The model isn't broken — it's misapplied.”
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