I believe your last paragraph illuminates the answer: how does a fund with $100M to invest come up with the sales funnel to generate 100 $1M quality deals? You arguably have to do the same amount of work per deal (let’s be generous and say somehow it is 1/2) and your profit is 1/100. So your costs/workload are 50 times higher. (edit: looking back at this I believe I’m not even being pessimistic enough, but I’m too lazy to do the math. We’ve got 5% of 5% sorts of things going on here. So using these numbers to fill your funnel you need 400 initial meetings for one big deal, or 40,000 initial meetings for 100 small deals. That’s one person vs 100 people on payroll. But with small deals you have higher people noise and so you probably need more stages in your funnel and specialization. So it’s probably much worse.)

Then you have to engage with the company, take a board seat, etc. Only way it pans out operationally is if you can still succeed while being really passive (hasn’t worked yet) or automate it. But if you automate it people will know it is automated and game it.

I have seriously suggested that there should be a "million startups" fund - I think it was when softbank lost X billions and I reckoned it was feasible to fund a million YC style / cost companies globally. Yeah it's not viable in SV but there are a lot of cities outside USA.

Do all of the problems you allude to there exist - yes absolutely. But we need something to spin the flywheel.

There is a story that inspires me is https://en.m.wikipedia.org/wiki/Arunachalam_Muruganantham - he invented a low cost tampon making machine - it was not the technology but the marrying of tech, social entrepreneur and local cultural knowledge that increased wealth - and that's the next stage - we don't need another social media giant - we need thousands of locally useful social media (for definitions of local, social, useful etc)

And finally to be brutal - if some fund has 100M to invest and it's too tough to build out their deal funnel, no one is going to sympathise :-(

Wow that is a great story. I learned about social enterprises a few years ago and since have been collecting related resources and putting them here https://github.com/RayBB/awesome-social-enterprise

There's very little technology risk, but there's absolutely enormous business risk in any technology venture. There's a reason no bank will loan 250k-650k to a 2-5 person tech startup with no revenue.

There is a "super" risk issue I am trying to put into words.

Somewhere there is a different approach to capital structure and corporation structure. The one we have ... it works yes. But it's not the only one and we can see problems. And we should try to encourage some experimentation- Mittelstand is one divergence from the UK Limited company model that kind of came packaged with the industrial revolution. (That it came from the UKs big rival in the revolution says a lot)

Why should Bezos or Musk or any early founder get so much of the upside ? Is having a hierarchical command structure stable ? As the oil / Electric / Silicon revolutions start to come to an end, will we need different corporate and capital structures to handle a more sustainable model?

Why should public markets demand quarter on quarter growth as if that was a natural state of affairs (which tends to force every PLC to be a conglomerate whether it wants to or not (tech giants not withstanding). Should companies not be like Unix commands and just do one thing well?

All these are choices - we could have smaller companies, democratic companies, different companies. But we choose not to. (Don't say they are competed away in the market - how many co-operatives exist to be competed away?)

Maybe we can continue the kind of tech-social change we have been seeing for past 200 years. If so keep the scaffolding up. But otherwise maybe we should experiment with new forms of organisation. Because that's what has helped humans rise out of the mud - how we worked together to build something ... less muddy.

And choosing the right kind of organisation for the job at hand is crucial. And an equity corporation controlled by one or two people employing millions who have no say in its direction, might not be the right choice.

So fund a few wild cat companies - we might surprise ourselves.

Edit: literally just ran over this comment : https://news.ycombinator.com/item?id=31346487 (ignore my dumb sarcasm after). But the point is that a congress with 5,000 congressmen is a wildly different beast to the current one. And potentially better (very arguable). But that it's such a crazy, reject it without thinking idea is the whole point - there are alternatives to our current system (and yes that does include fucking it all up and crashing the economy - but we are risking that anyway).