This Week in Startups The Definitive History of VC with "Power Law" author Sebastian Mallaby | E1550
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Sep 1, 2022 Sebastian Mallaby, author of "Power Law" and a senior fellow at the Council on Foreign Relations, explores pivotal moments in venture capital history. He discusses the 'youth revolt' in startups, highlighting Zuckerberg's choice to bypass Sequoia. He contrasts Kleiner Perkins' rise and fall with Sequoia's sustained success, and delves into characteristics of legendary VCs. Mallaby also examines institutional investors' growing interest in VC and the shifting landscape of tech investments, revealing insights that shape today's venture capital dynamics.
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Early VC Research
- Sebastian Mallaby initially struggled to find a pattern in VC investments after hearing anecdotes about seemingly random decisions.
- He questioned how bicycle times or "so" being the reason for investment could be a source of alpha.
Hot Tub Deals
- Don Valentine, known for his tough personality, once joined a founder's hot tub meeting to secure an investment in Atari.
- This willingness to engage with eccentric founders gave him access to deals others missed.
Zuckerberg's Pajama Pitch
- Mark Zuckerberg, skeptical of VCs, arrived late in pajamas to a Sequoia meeting with a slide deck titled "10 reasons why you should not invest".
- This act of rebellion reflected a growing distrust of traditional VCs among young founders.
