Greenberg Center for Geoeconomic Studies

Venture Capital in Silicon Valley and Beyond

Project Expert

Sebastian Mallaby
Sebastian Mallaby

Paul A. Volcker Senior Fellow for International Economics

About the Project

While there are many excellent books about the engineers and entrepreneurs of Silicon Valley, no authoritative account exists of the financiers who enable the moonshots. I aim to fill this gap with my new book, The Power Law: Venture Capital and the Making of the New Future. Appearing in January 2022, The Power Law delivers a comprehensive account of venture investing in Silicon Valley, showing how the region's distinctive network-based social capital is nurtured by hyper-connected investors and exploring the full range of approaches: VCs, angel investors, incubators, and growth-equity funds. It also explains what other regions, notably China, have learned from the Valley's example, asks what sorts of innovation venture capitalists may support in the future, and addresses the critiques of the VC business, from the under-representation of women and minorities to the suspicion that venture capitalists back “blitz-scalers” that wreak excessive disruption. 

My account will also situate VC and angel investing in the context of the long-running debate on rival visions of capitalism. The tech finance of the Valley is a sort of anti-Wall Street version of finance: indifferent to Modern Portfolio Theory and quantitative models; long-termist rather than short-termist; involved rather than arms-length; immune to the accusation that financiers shuffle pieces of paper rather than funneling capital to the real economy. At a time when the short-comings of the "financialized" Anglo-American model of capitalism are widely debated, and when VC-backed "unicorns" are willing to defer public listings for longer than ever, Silicon Valley’s financial model may offer part of an alternative solution to the age-old problem of how best to funnel capital from savers to productive companies. 

 

No publications were found for this project.

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