What really happens with most government run investment where funds are allocated to outside investment people or groups (ex. EU funds), is that the investors have limited incentives to actually/help create successful companies.
In fact, what often happens is that the investors manage to funnel a large portion of the funding back to their own pockets by requiring the startups to pay for bootcamps and trips that are run by the investor and mentors (i.e. investor's buddies) and pay for services and facilities that the state provides the investors for free.
On top of this, the investors get very generous salaries and reimbursed for many if not all expenses (i.e. a great opportunity to double dip, see above).
Finally, if the investor has any money at risk in the fund it is normally all but fully insured by the government and they get the lion's share of any returns, if there are any. All in all, it is a great deal for the investors with almost no accountability and little net benefit for the startups.
By your definition, most state venture-funds are born to die. What you are describing is a structural issue, which while plausible, is not definitive the structure that a state VC will wield. Some very good examples of state VCs that did not fall into this trip are Temasek/GIC from my country (Singapore), as well as that of Norway. And yes, Termasek have a VC that does tech fundings too. They recently funded Snapchat.
I would exclude from this explanation, state funded VCs or sovereign wealth funds that invest in later stages. They are most commonly investing for strategic reasons or just piling onto an already established leader.
In fact, what often happens is that the investors manage to funnel a large portion of the funding back to their own pockets by requiring the startups to pay for bootcamps and trips that are run by the investor and mentors (i.e. investor's buddies) and pay for services and facilities that the state provides the investors for free.
On top of this, the investors get very generous salaries and reimbursed for many if not all expenses (i.e. a great opportunity to double dip, see above).
Finally, if the investor has any money at risk in the fund it is normally all but fully insured by the government and they get the lion's share of any returns, if there are any. All in all, it is a great deal for the investors with almost no accountability and little net benefit for the startups.