Let's Make Venture Capital Better

Venture capital is an iconic American success story. Over the past 60 years, the venture fund model advanced technology to unseen levels, encouraging the best and brightest minds to lead the economy in a direction of invention, innovation, and competition. In the ten years between 2009 and 2019 the U.S economy saw its longest and largest bullish expansion, the S&P 500 index grew 330%, 18 million jobs were created, and unemployment decreased by almost 250%. As of 2015, venture backed startups makeup one-fifth of US public companies. In 2019 alone, venture capital allocated $136.5 billion to U.S based firms.

It’s not always about the money

With supreme focus on valuation and big exits, it is hard to imagine that the VC model could be flawed. Venture dollars are best suited for and channeled into opportunities with the clearest potential for billion dollar (‘Unicorn’) exits. In the process and more often than not, we sacrifice social value for market valuation. Evidence reveals more capital, talent, and resources are plowed, sometimes in a wasteful fashion, into problems that seem easy monetize or readily scaled, even though they only scratch the surface on social impact. The venture model for all its good, has prioritized putting five billion people on the internet while ignoring the homeless 150 million or the 1.6 billion living in inadequate shelter. A simple interpretation of the fact should readily show that the latter needs are dire and more urgent relative to the former. Of course, the former is not less valid because it is less urgent, but so is the latter.

As venture capital increasingly becomes the foundation stone for economic innovation, more and more valid societal needs are being ignored. Unsurprisingly, social issues in America have garnered limited traction in the direction of innovation. It seems we have settled on the idea that venture for the social good is lofty, expensive, and unattainable.

Y-Labs Pivots VC Model for Social Good

In the 10 years since our incredulous bullish expansion, most Americans missed out on ‘silicon prosperity’ — wage increased only 4%, while complicated social issues continue to drag on. See: the opium epidemic, homeless population, intergenerational poverty, food insecurity, and rising cases of mental health ailments among youth. Today, the coronavirus pandemic has blown the lid off of our ‘carefully constructed’ hut. It became glaring that our seemingly resilient growth has always been nascent and that there are needs our venture machine is unable to grasp.

While these issues remain at the forefront in the nonprofit sector, there has been little to no innovative solutions mitigating their long-run impact. We could blame the nonprofit sector for its inability to be creative, or we could turn our heads to the most ‘virtuous’ sector in our economy, and ask: why is value generating venture capital not building disruptive startups to alleviate our most critical social issues?

Through leveraging education and entrepreneurship, Y-Labs was created to partly address the social impact gap being overlooked by Big-Tech and venture capital. We have created a selective virtual incubator designed for young people to pursue entrepreneurial projects targeted at serious social issues and help non-profits involved in these sectors become more efficient and effective.

An Accelerator for today’s Gen Z’s teens

This summer, we are bringing together talented teenagers with demonstrated talent in STEAMS (science, technology, engineering, arts, mathematics, sports), to incubate solutions to critical social issues within their community. They will be thought to leverage sophisticated technology, Machine Learning, AR/VR, Robotics, Blockchain and more, to develop innovative solutions to address critical social issues. Our program combines E-learning with professional mentorship within STEM fields to support youth-led projects for social change. STEAMS is our extension of STEM to include Arts and Sports because most social issues require interdisciplinary perspectives. Demonstrating talent in any of these fields proves tenacity, discipline and ability to solve problems.

We gathered leaders and professionals in design, technology, entrepreneurship, and science to mentor participants’ project conceptualization from prototyping through completion.

Our virtual-first learning approach will ensure we are able to reach students independent of location and provide an enriched but familiar classroom experience through live interactions and enhanced social engagements. After the program, students will receive lifetime access to our e-learning platform, continued mentorship, and an opportunity to obtain grants should they continue to pursue their project on a broader scale.

We believe the idea of market valuation should be expanded to embrace social value. Granted, only time will tell if we are right or wrong.

Visit us at Y-Labs Ventures.

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