Where does innovation come from? Startups.
Where do startups come from? Venture capital.
For nearly half a century, this has been the conventional wisdom of Silicon Valley. Venture capital is the lifeblood of the Bay Area tech industry, ebbing and flowing with every business cycle. More broadly, venture has provided the initial form of financing for most of the world’s fifty most valuable publicly traded global corporations that were founded after the late 1960s. And it has become a standard part of how institutional investors allocate capital, from public employee pension funds to university endowments to wealthy families.
At present, venture capital deploys roughly $84 billion per year in the United States. And venture capital is no longer solely an American phenomenon. The model has been replicated all over the world, especially in burgeoning Asian tech ecosystems from Beijing to Bangalore.
Yet relatively few people understand how venture works or where it comes from.