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Technology & Innovation

Is Venture Capital Broken?

From the standpoint of innovation, entrepreneurs may be changing the way they are thinking—they are becoming less ambitious, says Sean Parker, creator of Napster and Facebook.

Sean Parker, the entrepreneur behind Napster and Facebook now turned investor, was talking about the state of the venture capital industry last week when he said: “There’s too much money chasing too few deals.” At 30, Mr. Parker, who was recently portrayed by Justin Timberlake in “The Social Network,” has been thinking a lot about innovation—or the lack of it — in the United States. And he’s come to a depressing conclusion about the money industry that he says used to be “the engine of innovation” for this country. “The risk-reward doesn’t work out in favor of putting money into venture capital anymore,” he said.


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