Broken dreams Quote by Jonathan Haskel
““While we might expect to see venture capital develop further in an increasingly intangible economy, it is not clear that governments can or should do much more to promote it than they already do. As Josh Lerner showed in The Boulevard of Broken Dreams (2012), once tax breaks or subsidies for venture capital get beyond a certain level, they tend to encourage dumb investments (since the tax gain on its own is enough for the investors to profit); since the entire point of venture capital is smart investment, very large tax breaks are self-defeating. For a country to grow its venture capital sector, time and favorable framework conditions are more important than additional subsidies.””
About This Quote
Source Book: The Boulevard of Broken Dreams by Josh Lerner, 2012
Excessive tax breaks for venture capital lead to unproductive, “dumb” investments; smart growth relies on time and supportive frameworks, not subsidies.
In simple terms: Too many subsidies cause bad investments; good VC needs time and good rules.
Key Takeaway
Focus on building stable policies and patient capital.
Themes
venture capital
public policy
economic growth
tax incentives
investment quality
Mood
analytical
critical
forward‑looking
Type
policy analysis
economic theory
When to use this quote
- startup ecosystem development
- policy design
- investment strategy
- economic planning
Key Concepts
market efficiency
government role
risk allocation
Questions to Reflect On
- How can governments create a balance between support and market discipline?
- What non‑financial policies most effectively nurture VC?
A Different Perspective
Large subsidies can crowd out genuine market signals and innovation.
