The Lost Decade of Venture Capital: PitchBook Confirms What I've Been Saying for Years

🚨 Breaking: PitchBook reports that VC-backed companies are heading for the fewest U.S. IPOs in over a decade. At the same time, VC-backed startups are failing at the highest rate in at least 10 years

Welcome to AI Health Uncut, a brutally honest newsletter on AI, innovation, and the state of the healthcare market. If you’d like to sign up to receive issues over email, you can do so here.

Monday’s Profusa (ticker: PFSA) SPAC IPO (initial public offering) on Nasdaq marks the 6th digital health IPO this year. Yes, it’s not just Hinge and Omada, folks. 😉 Seems like good news. But this article builds on something deeper. PitchBook finally caught up to what many of us have seen in the data for a while now: this has been a lost decade for VC-backed IPOs. Institutional investors have finally stopped underwriting the gravy train of Chamath-pushed lemons to public markets. In tomorrow’s piece, I offer a deeper reflection on how we can realign healthcare innovation financing with the actual stakeholders—customers, patients, doctors—and finally start creating, not destroying, value in healthcare. (Looking at you for the latter, Hemant Taneja. 😉)

But first things first. If you cannot afford this article—perhaps you’re a student or currently between jobs—please reach out. That’s precisely why I created the AI Health Uncut Founding Member Club. Thanks to generous donations and support from these wonderful individuals, I’m able to provide access to anyone who needs it. By the way, students reach out frequently, and I’m always glad to help.

If you’d like to become a Founding Member of the AI Health Uncut community, you can join through this link. You’ll be making a real impact, helping me continue to challenge the system and push for better outcomes in healthcare through AI, technology, policy, and beyond.

Venture capital isn’t just destroying value for customers and founders. It’s cannibalizing its own investors. LPs (Limited Partners) are bleeding returns while GPs (General Partners, aka venture capitalists) chase fantasy multiples that never materialize.

We need a new asset allocation formula that prioritizes customers and patients, not VC pockets.

https://youtube.com/shorts/pVjnihL7jO0

My readers already know. I’ve been banging this drum for two years. Why isn’t anyone looking at aggregate VC performance? Everyone talks about unicorns. No one wants to talk about carcasses. The truth is VCs have been destroying value not just for customers and founders, but for their own LPs.

Now, even PitchBook—a data platform built to serve the VC echo chamber—admits it. Reluctantly. If Natalia Kniazhevich at Bloomberg hadn’t forced it onto the front page, you probably wouldn’t have heard a word about it. PitchBook buried the lede and gave the story a neutered headline.

Why? Because PitchBook, Carta, and others rely on the very VCs they’re supposed to be reporting on. Sponsors. Advertisers. Call them what you want. They’re not going to kill their golden goose. If PitchBook published the full dataset the way I’ve done for digital health and healthcare AI, the tremors would reach Sand Hill Road and beyond. But disruption isn’t in their business model. Appeasement is.

Same story with Forbes’ annual “Midas List.” It ranks VC firms with absolutely no performance metrics! That’s why Andreessen Horowitz, Sequoia, and General Catalyst always make the cut. It’s rigged. And it’s disgusting.

Let’s get real. However you slice it—number of IPO exits, startup survival rates, or long-term returns—venture capital has torched hundreds of billions in value over the past decade. In digital health alone, we’re looking at $50 to $80 billion incinerated in just five years.

So let’s talk. How did we let VC bros run the healthcare industry into the ground? And more importantly, what the hell are we going to do about it?

TL;DR:

1. PitchBook’s Half-Hearted Confession — IPOs Hit Rock Bottom

2. If Institutional Investors Won’t Touch Your Zombie Unicorn, It’s Likely Already Dead

3. If You’re a VC Bro and No One Wants Your IPO, What Do You Do? You Rig the Game.

4. Secondaries: The Smartest Scam in the VC Playbook, or Where the Lies Get Liquidity

5. VC-Backed Startup Survival Rate Also Hits a Decade Low

6. Digital Health IPOs Are Low, But VCs Are Active. And No, It’s Not Just Hinge and Omada.

7. Where Will the Next Wave of Digital Health Bankruptcies Erupt? Ask Chamath—He’s Probably Relaxing on His Fourth Villa in Amalfi. 😉

8. World Eaters: A Riveting New Book on How Venture Capital Is Devouring the Economy

9. Let’s Be Honest: VCs Destroy Value, Bootstrapped Founders Build It — Especially in Digital Health

10. OK, So VCs F*cked Up. What’s the Alternative?