As I understand it, the current model is that the people with money give it to the venture capitalists, and that it's the VCs who are the ones who interfere with the start-ups.
Presumably the idea would be that the "collective" would have on-staff consultants who both advise the start-ups and who convince investors that, in aggregate, the start-ups will make money.
Though I think the real problem with the VC model is the necessary "hockey stick" profit chart. The fact that a "lifestyle business" is considered a failure means that lots of functional, profitable businesses are forced to grow to the point that they really do fail.
I'm not quite sure where you are quoting from.
In my model, which I call the Entrepreneurial Collective, there is no distinction between entrepreneurs and investors. There is no such thing as an 'outside investor.'
My goal is to create a model in which there is only one role (entrepreneur/investor) and no one has power over anyone else.