Premium: Venture Capital Is Killing Itself

Newsletter · Watch/Read · (gathered 2026-10-18)

• The 2012 JOBS Act made a critical mistake by eliminating a 1964 rule (Section 12(g)) that previously forced large private companies (over 500 shareholders) to report like public ones, enabling venture capitalists and tech companies to “legally scam millions of retail investors” through inflated valuations.
• This change incentivized companies to stay private for longer, allowing them to reach multi-billion dollar valuations (e.g., Instinct’s $10B valuation with zero revenue) before going public, effectively draining most potential value from retail investors who now serve as “exit liquidity” for early investors.
• The current system fosters “venture welfare,” keeping unsustainable, cashflow-negative companies alive longer, leading to a massive valuation bubble, especially in AI (e.g., Anthropic’s projected $2T valuation based on flimsy promises), which poses a significant threat to public market investors.
• The author aggressively advocates for reforms or outright repeal of the JOBS Act, arguing that venture capital is no longer a trustworthy investment vehicle and its current practices harm retail investors, reduce capital for good startups, and incentivize the development of bad, unsustainable companies.