World Eaters: How Venture Capital Is Cannibalizing the Economy

Community organizer Bracy debuts with a bracing takedown of the venture capital financing model. The pressure VC places on startups to scale “at breakneck pace” drives businesses to make reckless decisions, she contends, describing how investors tanked the once profitable LocalData, which created software to help municipal governments streamline property tax information, by pushing it to expand into offerings for the real estate sector that never caught on. Exploring how other businesses bend the law in pursuit of growth, Bracy details how Shef, which delivers food prepared by amateur cooks to customers’ homes, tests the boundaries of regulations requiring salable food be cooked in commercial-grade kitchens. Elsewhere, Bracy excoriates such VC-backed companies as Uber for ushering in a gig economy that classifies would-be employees as contractors to lower costs. Bracy’s evenhanded analysis makes clear that for all VC’s failings, it has sometimes provided needed funds for such valuable companies as the insulin manufacturer Genentech, and she provides pragmatic suggestions for remedying VC’s worst excesses. For instance, she recommends requiring investors to hold their stakes in companies for longer than the standard 10 years, incentivizing them to focus on a business’s long-term viability over unsustainable short-term gains. It’s a convincing call for change. Agent: Leila Campoli, Stonesong. (Mar.)