&gt; Isn’t the whole basis of venture investment being able to identify business that will return above the risk-adjusted return?<p>No, it&#x27;s to generate proprietary deal flow by building a brand for your firm. YC has done this with HN and pg&#x27;s essays, while a16z has done this with Marc Andreessen&#x27;s incessant tweeting and all the blogging by Chris Dixon, Ben Evans, et al.<p>At this point, YC&#x27;s&#x2F;a16z&#x27;s success has become self-perpetuating - the best founders&#x2F;companies will apply to YC and pick a16z over other VCs, the best employees will join companies backed by YC&#x2F;a16z, etc. It&#x27;s no different from institutions like McKinsey or Harvard.