Because too many 'investors' are losing too much money on stupid non-projects. And the ROI you claim is the motivation is clearly not there.
But wait! Maybe losing money is the point.
Maybe, anthropologically speaking, being able to waste money on startups is some kind of potlach-style social signalling game which 'investors' use to reinforce their own status.
Think this is far fetched? If so, explain to me why the ROI across the VC scene as a whole is so wretchedly bad compared to other investment opportunities, but it keeps getting money thrown at it regardless - even when this means starving viable but unsexy bootstrapped businesses that don't have Startup Appeal [tm], but are more likely to be both useful and profitable in the medium to long term.
I guess you could look at it as a sport then. Race cars and speed boats aren't a sound investment even if you occasionally drive them competitively, but they can be fun and are social indicators.
There's not much of a point in investing in unsexy bootstrapped businesses because they're stable. Stability is boring. If you can turn a funded startup that is bleeding money left and right into a profit, that's a much bigger thrill to the investor.
But it's not only VCs. "Serial entrepreneurs" pretty much admit they're in it as a sport.
That said, I wouldn't be surprised if a lot of stock market investors weren't in it as a sport either. The amount you win or loose isn't as important as the thrill of winning or loosing.
Because too many 'investors' are losing too much money on stupid non-projects. And the ROI you claim is the motivation is clearly not there.
But wait! Maybe losing money is the point.
Maybe, anthropologically speaking, being able to waste money on startups is some kind of potlach-style social signalling game which 'investors' use to reinforce their own status.
Think this is far fetched? If so, explain to me why the ROI across the VC scene as a whole is so wretchedly bad compared to other investment opportunities, but it keeps getting money thrown at it regardless - even when this means starving viable but unsexy bootstrapped businesses that don't have Startup Appeal [tm], but are more likely to be both useful and profitable in the medium to long term.