Sebastian Mallaby, a renowned expert in venture capital and a Paul A. Volcker senior fellow for international economics, shares insights from his latest book, exploring the venture industry's evolution and its profound impact on innovation. He discusses the crucial roles of mentorship and networking in fostering startup success, and reveals challenges like the industry's gender gap. Mallaby also reflects on the lessons from his writing journey and emphasizes the importance of focusing on personal passions for deeper fulfillment in work.
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question_answer ANECDOTE
Liberation Capital
Arthur Rock pioneered West Coast venture capital by backing Fairchild Semiconductor.
He liberated the "traitorous eight" scientists from corporate culture, enabling them to start their own company.
question_answer ANECDOTE
Hands-On and Stage-by Investing
Don Valentine at Sequoia Capital added hands-on involvement, transforming Atari from chaos to success.
Tom Perkins at Kleiner Perkins pioneered stage-by investing with Genentech, mitigating risk and rewarding progress.
volunteer_activism ADVICE
Network is Key
Build your network to access deals and evaluate companies effectively.
Networking gives early warnings and insights into the competitive landscape.
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More Money Than God provides the first authoritative history of hedge funds. The book tells the inside story of hedge funds, from their rebel beginnings to their current status as powerful financial entities. It covers key figures and institutions, such as A.W. Jones, George Soros, Julian Robertson, and Long-Term Capital Management, and explains how hedge funds have shaped the financial landscape. Mallaby's work is based on extensive interviews and provides a balanced view of the industry's impact on finance and the global economy.
The Power Law
Venture Capital and the Making of the New Future
Sebastian Mallaby
In 'The Power Law', Sebastian Mallaby provides a riveting and meticulously researched account of the venture capital industry. The book delves into the history of tech incubation in Silicon Valley and worldwide, featuring key figures from firms like Sequoia, Kleiner Perkins, Accel, Benchmark, and Andreessen Horowitz. It covers iconic successes and failures, such as the birth of Apple and the rise and fall of WeWork and Uber. Mallaby also examines the 'power law' that drives the VC business, where a few massive successes compensate for numerous failures. The book highlights the industry's influence on innovation, its biases, and the rising competition from China's venture capital sector[1][3][5].
Sebastian Mallaby is the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations, a contributing columnist for The Washington Post, two-time Pulitzer Prize Finalist, and New York Times best selling author. His most recent book, The Power Law: Venture Capital and the Making of the New Future, chronicles the history of the industry, and his key takeaways serve as the perfect conclusion to our mini-series. Our conversation starts with his career as a writer and how he approaches writing books. We then dive into the origins of the venture industry, foundations of early-stage investing, and critical success factors. We dissect different ownership structures, the importance of mentorship, competition, the current pace of capital deployment, and venture capital abroad. We close discussion the industry’s gender gap, challenges to future success, and thoughts on Sebastian’s next project.
Capital Allocators – Inside the Institutional Investment Industry 
