Venture capital (VC) is a double-edged sword. On the one hand, it offers the promise of innovation, job creation, and economic diversification, key drivers in advancing an economy. On the other, it also poses risks that could disrupt our values, challenge our development philosophies, and compromise the very foundation of our nation’s development philosophy. As we embark on the journey of economic growth, the allure of VC funding may seem tempting. Can we afford to embrace VC without losing sight of what makes our nation unique?

The benefits of VC are clear. In regions where startups flourish, VC funding has been instrumental in transforming small ideas into global powerhouses. Silicon Valley, for example, thrives because investors place their faith—and funds—into unproven concepts, some of which grow into giants like Google and Facebook. If we wish to nurture an entrepreneurial ecosystem, especially among our youth, venture capital could be a vital tool. With VC funding, innovative startups can access the resources needed to expand, grow, and compete on the global stage. The potential for job creation is immense, especially in emerging sectors like green technology, sustainable energy, and eco-friendly tourism—areas aligned with Bhutan’s long-term development goals.

However, the risks are equally pressing. Venture capitalists expect rapid returns on their investments, and in their drive for profit, they may push businesses to scale quickly, sometimes at the cost of long-term stability. This pressure to grow fast could steer our entrepreneurs away from the values we hold dear. Unsustainable growth driven by short-term profits might prioritise commercial interests over the well-being of people and the environment, leading to decisions that erode the country’s commitment to happiness and sustainability.

Further to that, accepting VC means giving up a degree of control. Founders often cede significant equity to investors, allowing them to influence the direction of the company. For Bhutan, this raises concerns. What could happen if these investors, many of whom could be foreign, prioritise returns over ours core values? The loss of local control could jeopardise industries critical to the nation’s identity, especially in areas like tourism, where the balance between commercialisation and cultural preservation is delicate.

Then there is also inequality that VC can exacerbate. Historically, venture-backed companies tend to cluster in urban centres, benefiting a small group of well-connected entrepreneurs. In our case, where rural development and equality are central to national policy, an unchecked venture capital wave could fuel disparities between urban and rural areas.

So, what path should Bhutan choose?

The answer lies in adopting a hybrid approach. VC must be welcomed but with caution. Regulation is key—VC investment should align with Bhutan’s development principles, and the businesses that benefit must be held accountable for sustainable and socially responsible growth. This could mean encouraging local venture funds focused on impact-driven startups that contribute not only to economic growth but also to the nation’s social fabric and environmental goals. Also, equally important, capacity building should take precedence—investing in the education and mentorship of entrepreneurs to increase their chances of success.

We cannot afford to ignore VC. But we can, and must, approach it on our terms—ensuring that the economic gains it promises do not come at the expense of our values, our environment, or our people.

In a world chasing profit, we must feel compelled to chase purpose.