Do entrepreneurs have the "best and worst job in the world”? This VC thinks so.

In this series, professionals at the Milken Institute Global Conference debate the most pressing issues facing their industries today. Write your own #MIGlobal post here.

As a female venture capitalist, Kara Nortman gets asked to speak on a lot of panels. She declines a lot of those invites for scheduling reasons, but for the past three years she has refused to miss Milken Global.

An annual conference in Los Angeles, the three-day Milken Institute Global Conference brings together some 600 thought leaders in financial markets, health, government, education and beyond. The speaker lineup is just as diverse as the topics that are discussed: This year you can find Kobe Bryant discussing his career in sports while Sean Parker sits on a panel about activist philanthropy. 

Nortman is one of just a few folks from the world of startups and venture capital to speak at the conference. She says she comes back year after year not only because it's a nice break from the tech bubble, but also because everyone takes their discussions seriously. “In a lot of tech panels, people just roll on the stage,” she jokes. With the conference starting tomorrow, I caught up with Nortman about her upcoming panel on the future of venture capital and the state of startupland today.

Edited excerpts:

Caroline Fairchild: What role do venture capitalists play in solving the world's biggest problems? 

Kara Nortman: Venture capital is by definition an asset class that isn’t complacent. It is looking to fund entrepreneurs who are inspiring, can attract talent, and go after big challenges in the world. A lot of what I am passionate about, and where venture is going, is not necessarily the big consumer companies, but the next order of challenges in the world. How do we figure out affordable healthcare? How do we figure out how to educate our kids outside the classroom? How do we fix the income gap so we don’t have people like Donald Trump running for office? When venture capitalists apply this disruptive thinking and go after things that people say are impossible, that is when exciting things happen. Most of these companies will fail, but hopefully some will succeed and will do something meaningful. Venture as a whole can play a big role in funding the right people who want to do it and creating the right structure to go after it.

CF: What role do VCs play in that inspiration?

KN: Kara Swisher likes to talk about Silicon Valley as a big minds going after small problems. That obviously is not true, but we need to inspire our biggest thinkers not to go to Wall Street or work on a dog-walking app, but to really solve big problems. Then when they solve big problems, they can’t be laissez faire about it. They need to fill gaps around where they have knowledge. For a lot of companies, having a lawyer on the team who really understands the regulatory landscape is crucial. Venture capitalists need to be knowledgeable about it and ask the right questions and get the right approvals.

CF: What else do investors need to consider when backing ideas like Theranos that are solving big problems, but could also end up in trouble?

KN: Investors have to be thoughtful not just about the amount of time that they are spending with their portfolio companies, but the kind of time that they spend. They don’t need to solve the problem, and it’s usually a bad thing if the venture firm is solving the problem. But they need to make sure that they are thoughtful about time allocation. We need to be thoughtful about what could make or break a company. We need to be honest about where the holes are and supplementing them in the places where you know the team needs to be pushed.

CF: In your mind, what are the biggest challenges facing venture capital today?
KN: A lot of the most interesting companies in the future will be industry specific around education or health or other industries. Industry skill sets are dispersed across states. If you want to talk about aerospace, than you've got to go to Cincinnati. If you want to figure out the future of the city and the role of cars and driverless cars, you have to go to Detroit. Yet there is another skill set around being an entrepreneur and scaling a startup that is separate. There is a huge amount of knowledge around that in the Bay Area. Bringing those skill sets together is a challenge, but they have to come together collaboratively to build great businesses and do this crazy thing called starting a company, which is the best and worst job in the world.

CF: Given the funding market right now, how are investor priorities changing?
KN: I think Bay Area funds and VCs are back to really wanting to fund scalable software models or big industry models where venture capital can really make the world a better place and the tech is at the core of the innovation. If it is the food industry, for example, they want to fund new molecular concepts for meat. They don’t want to fund companies in the e-commerce or retail space where you have to get the interaction of the consumer down, which is really, really hard. It is moving away from wanting to invest in ideas that are more about the execution of the idea rather than the technology itself.

CF: How is all the doom and gloom affecting your work?

KN: In a weird way, it feels more comfortable for me because there is not this feeling of pressure or urgency to run after things that don’t make sense. There is time to do due diligence. Everything is back to a pace where you can be more thoughtful and true to who you are. Before, growth was being prioritized over capital efficiency. In some cases where you have a true network effect in the business, that is a good thing. In a lot of business, it is a bad thing. Capital constraints make you figure things out in a tighter way. Tighter capital makes you be truly honest with yourself on a unit economics level. We are back to the basics: Reasonable valuations and the right types of entrepreneurs who are committed long-term to the idea.