What the enthusiasm for funding startups means for the VC world

FINANCIAL MARKETS are fuelled by stories, and the most skilful storytellers are found in venture capital. For a start, venture capitalists have to listen to a lot of fairy tales from the would-be entrepreneur. “The world will look different in a decade,” he says. “My startup will be the leading business in a new industry.” VCs tell themselves stories about how they can foresee what others cannot, and how this stands to make them a lot of money. And they retell them to potential investors in their funds.