It's still how many new businesses raise capital. That's how the biotech industry works for example. (In biotech VC just gets you to the IPO stage and you don't cash out at IPO since typically those companies don't even have an approved product yet).
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> It's still how many new businesses raise capital.
Should it be? Theranos stained biotech badly.
No knowledgeable biotech VC invested in Theranos, because they were unable to pass due diligence. Theranos investors were unsophisticated family offices who didn't operate in the space, didn't know enough science or technology themselves, and didn't know how to run due diligence. Had Theranos attempted to open up enough to go public in those circumstances, they would have been exposed much more quickly.
Business and markets run on trust. The less trust you have the more overhead you have to verify that every claim your counterparty makes is true. That's expensive and means some worthwhile things become impossible to do profitably. It's a tradeoff and I think in general the US finds a good spot between regulation and ease of doing business, and the rest of the world benefits from it too.
There are failures of course, but most of the big ones recently have been in private markets not the public ones.