The Impact of Venture Capital on Startups

Venture capital plays a crucial role in influencing startup dynamics, particularly regarding the pursuit of rapid growth, known as scaling. Despite funding less than 1% of all new enterprises, its impact is significant, as many startups operate under the pressure to show quick returns to investors. This pressure leads to decision-making that prioritizes financial metrics over long-term sustainability, causing organizational challenges that often manifest as a reliance on low-wage labor to facilitate operations. Understanding this interplay between venture capital and startup culture is essential for comprehending the current landscape of innovation and its inherent inequalities.