Venture Capital Backed Startups Lack Diversity in Industries
Venture capital-backed startups have a tendency to concentrate in a small number of industries, with software being the predominant choice. This means that other large and economically significant sectors are left with very few venture-capital backed startups. As a result, these industries receive fewer new companies and innovative ideas. These sectors are then left to rely on growth from existing firms that are unlikely to embrace disruptive innovation or on startups that finance themselves through bootstrapping or debt, leading to slower growth.
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