Does all this matter? Surowiecki writes, "What we care about, after all, is not whether investors get good returns or VCs are well paid. We care about whether new companies are getting started and innovations are being funded."

But the sickliness of venture capital does matter to entrepreneurs, and it should matter to you, too. VCs no longer perform their historical functions: recognizing a few potentially disruptive technologies, finding great entrepreneurs who burn to commercialize those technologies, providing measured seed funding, and worrying startups to profitability. Instead, the partners of the typical fund invest more money, much later, in more companies, selected according to some risk management philosophy.

A well-known Silicon Valley investor (who asked that I not name him, lest he offend his partners) expressed the consequences: "VCs spread themselves over six to 12 portfolio companies, often spending as little as a day a month on each. This is terrible for both entrepreneurs and the country." There's research to back him up: Josh Lerner, a professor at Harvard Business School, has shown that the advice of VCs is an important reason why venture dollars are "three to four times as potent" as corporate R&D in spurring innovation. (Read why Lerner thinks governments are so bad at encouraging entrepreneurs.)

Past venture capitalists funded the technology companies that became the engines of the world's economic growth: Intel, Microsoft, Genentech, Compaq, Apple, Cisco. But there have been just two really transformative venture-backed companies in the last decade: Facebook and Twitter.

Might Twitter have sooner answered the question that we pose in the article "Can Twitter Earn Money?", had its VCs been more like their predecessors? My unnameable investor told me: "I wish the VCs on the board at Twitter would drop everything else and help Twitter build the solid business that the service so richly deserves. In the past, they would have." Write and tell me what you think at jason.pontin@technologyreview.com.