*VC: An American History*, by Tom Nicholas

An excellent and original economic history of venture capital, with lots of new material, brought together in a convenient and readable form.  Here is one excerpt:

…nineteenth century whaling can be compared to modern venture capital in at least three respects.  First, whaling was the archetypical skewed-distribution business, sustained by highly lucrative but low-probability payoff events.  Voyages often lasted several years and and covered geographic areas in the search for elusive whale pod.  The long-tailed distribution of profits held the same allure for funders of whaling voyages as it does for a venture capital industry reliant on extreme returns from a very small subset of investments.  Although other industries across history, such as gold exploration and oil wildcatting, have been characterized by long-tail outcomes, no industry gets quite as close as whaling does to matching the organization and distribution of returns associated with the VC sector.

The book also covers VC in the Industrial Revolution, to what extent Mellon and Morgan can be thought of as venture capitalists, the institutionalization of venture capital in the 1950s, how the limited partnership structure came to VC, the roles of Intel and Genentech, Sequoia Capital, and the growth of a true Silicon Valley ecosystem.

How about this?:

During the 1970s, San Jose State University was graduating more scientists and engineers than Stanford or Berkeley, while local community colleges within the California system provided crucial access to technical training programs.

Recommended to anyone with an interest in the topic, you can pre-order here.

Comments

Trump should work with tech and venture communities to make new company creation, which has been trending down, a thing instead of rewarding old, stodgy businesses that look to the government for handouts and other zero sum games. Fund basic research, reform H1B, lower investor requirements for investing in pre-IPO companies, attract more foreign students don't scare them away, push states to reduce red tape for company creation, enforce anti-trust (I know some here won't like that), shorten patent expiration, etc. Notice a theme? More competition, lower barriers to entry, freer markets.

Trump supporters are too uninformed to know what any of that is. A wall to keep out "undesirables", anti-choice Supreme Court justices, and "making foreign countries play fair" they understand.

'enforce anti-trust'

Heh, heh

Right, TC?

While Red China builds things and plans world conquest, Americans forceful argue about how create more apps. It seems a great plan.

Read about whaling in Melville's Moby Dick.

I think this is revisionist history: "voyages often lasted several years and and covered geographic areas in the search for elusive whale pod", implies whales were scarce, which is only true towards the end of the whaling period, due to over-hunting.

Bonus trivia: did Herman Melville really have a gay love affair with Nathaniel Hawthorne? (Wikipedia: "I liked Melville so much," Hawthorne wrote to his friend Horatio Bridge, "that I have asked him to spend a few days with me," an uncharacteristic move for a man so attached to his work that he would not suffer overnight guests to keep him from it), at least one writer imagines so and wrote a book about it.

I dunno. But a quick tour of google about romantic life aboard sea vessels just presented me with the title "buggery and the brittish navy." Which is my new favorite book.

You can read it while listening to “Rum, Sodomy and the Lash.”

"...buggery and the brittish navy ... "

This is why we defeated the British war machine ... twice ... and pulled their arses out of world wars ... twice!

However, do not give up on the Brits - we are a scion of that great father ( not mother) of democracy and individual freedom, though we brought it to another level.

Those brave British souls have declared their love of freedom, independence, and liberty and have broken free of the shackles of the EU, though the battle is not yet complete.

"the tree of liberty must be refreshed from time to time with the blood of patriots & tyrants." - Thomas Jefferson

Feel better now?

I really like the part of Moby Dick where the VC firm does an LBO of the whaling company, sells off the harpoons, fires the experienced boatsteers, and the management group buys the ship and then leases it back to the company.

And then runs the boat into the ground, goes to bankruptcy court and re-buys the bloated carcass for a fraction of the price. Eddie Lampert would make a great whale hunter.

VC firms don't do LBOs. You are confusing them with private equity more generally (all VC firms are private equity, but not all private equity are VC).

Yes, if strictlty defined

Can venture capital survive if the bottomless pits that are Uber and Lyft can't be foisted on the poor bastards who buy stock in the IPOs? If they can't, venture capital will suffer a major black eye and a whole lot of red ink. Indeed, one wonders if Silicon Valley itself will suffer irreparable damage. Maybe the disruption will change the culture and business model.

My prediction: the corrupt culture that is Wall Street underwriting and IPOs will survive

"San Jose State University was graduating more scientists and engineers than Stanford or Berkeley"

I've often wondered about San Jose State's role in Silicon Valley, it's a huge university that is seldom mentioned in articles about Silicon Valley. But it goes without saying that there are a ton of students there who are interested in tech education.

But there's quantity and there's quality. How good and how creative are the engineers that come out of San Jose State, compared to Stanford and Berkeley?

Limited sample but the first Silicon Valley names that come to my mind are:

Jobs and Wozniak. Jobs attended Reed College and Wozniak attended Univ of Colorado, then De Anza (a local community college), then Berkeley. (BTW higher education researcher Clifford Adelman studied college students' transcripts and discovered that this sort of "reverse transfer" from a 4-year college to a 2-year college, and then transferring again to a 4-year college, is fairly common; he called it "swirling".)

Page and Brin. Both Stanford, though as undergrads they went to Michigan and Maryland.

Hewlett and Packard. Both Stanford, though Hewlett went to MIT for grad school and Packard had a stint at Colorado.

I know someone who works at tech companies in the Bay Area who says that they're pretty much looking to hire only Stanford, MIT, or Caltech grads. Granted these may be snooty companies that have an overly narrow simplistic hiring process: forget about discriminating against women or minorities, they're discriminating against ... well everyone except for alums of those three schools. (I asked this person what school might be fourth on the hiring scale, thinking maybe CMU or Harvey Mudd or Harvard might get a mention, but they could only say "ummm".)

Okay, San Jose State's wikipedia page lists, among other companies, Oracle and Intel as being founded by SJSU alums.

Ellison: Illinois and Chicago

But Oracle's wikipedia page says there were two other co-founders:

Bob Miner: Illinois
Ed Oates: San Jose State

And Intel:

Moore: San Jose State, then Berkeley, then Caltech for grad school
Noyce: Grinnell, then MIT for grad school

So there is that. San Jose State is not Stanford, but its alums have been leaving some notable marks on Silicon Valley.

Thank you for your proof that the identity of the institution makes no fucking difference.

It didn't hurt that Mellon's father owned a bank. But most investors in the gilded age were opportunists who saw opportunities others did not.

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