It would definitely be in the best interests of VCs making money to have taxpayers fund their risk. The recent ESC proposition in CA being an example. If they can get the NIH to fund the risk, that's a great deal for them. I have some investments I wouldn't mind having the taxpayers take the risk on too.
I worked for a startup medical company with a very smart CEO. He was able to get a couple rounds of financing out of some VCs, and he's now in charge of a successful, private company. Man do they hate him! LOL! I'm sure they'll get their money back some day. The company is about 11 years old.
VCs lose a lot of money on technology R&D. Why do they do it? Because it only takes one winner to make up for the losses.
Aside from the risk factor, the real problem is that research usually benefits someone other than the person funding it -- that's just the nature of research. So to be fair, most technology research has to be broadly funded. Up until the Clinton Administration, the vast majority of technology funding came from the federal government for this reason, but was then decried as "corporate welfare", and slashed. Welfare, yeah, show me any other welfare spending that has a 1000% ROIC.
VCs lose a lot of money on technology R&D.
No, they do not. VCs invest in businesses, which involve some development but certainly not research.