Discussion #39: The Power Law: Venture Capital and the Making of the New Future, by Sebastian Mallaby

<p>Welcome to Citizen Scholar! Since launching eight months ago we’re reaching people all over the world, so we thank you for your support. If you enjoy our writing on civic virtue and individual excellence, we humbly ask you to share Citizen Scholar with your family members and friends who may enjoy it. The contents of the audio and text formats are identical and meant to accommodate your preferences. Please let us know if you have any feedback - we’re always looking for ways to improve!</p><p>Last week’s book examined American capitalism across broad stretches of time and various industries. This week we selected a book that focuses on one industry that is highly relevant today: the venture capital (VC) industry. Today’s US economy is hardly imaginable without the dynamism contributed to it by the homegrown technology industry. At some point in their development, most of the best-known technology companies in the USA accepted a check from a VC firm. In <em>The Power Law, </em>Sebastian Mallaby – of the Washington Post and Council on Foreign Relations – wrote an accessible narrative history of American venture capital. Its title refers to the phenomenon of a small percentage of venture-backed startups making investors the majority of their returns.</p><p>Like Mallaby’s other books, <em>The Power Law</em> is an entertaining read that skillfully introduces readers to a field in a way that is mostly review for people who have worked in or studied up on the subject before. A cynical Bay Area insider might accuse him of overemphasizing the VC-related stories that the East Coast media and outsiders of a certain vintage seem to care about most. Examples include the initial funding of Apple, the struggles of Theranos and WeWork, and ethical practices inside companies like Uber or VC firms themselves.</p><p>However, Mallaby does a lot more than play the hits. He tells a comprehensive story from the birth of Silicon Valley as we know it in the 1950’s to the landscape of 2021, when he appears to have finished the book. We’