Matthew Mandel

Sebastian Mallaby on the origins of venture capital:

Rock and Coyle met Kleiner and his comrades at a San Francisco restaurant for dinner. The visitors from Wall Street understood that the rebels wanted to operate as a team, without Shockley’s suffocating oversight. They further understood that the engineers wanted to remain in the Santa Clara valley, where they all had bought homes. But they had come to propose a novel way of meeting those objectives – one that the rebels had failed to imagine.

“The way you do this is you start your own company,” Rock said simply. By striking out on their own, the scientists would be able to work independently in the location of their choosing. But more than that, they would be company founders. They would own the fruits of their creative wizardry. A self-made loner from outside the establishment, Rock felt strongly on this last point. A certain kind of justice would be served.

Rock’s proposal took some digesting. “We were blown away,” a researcher named Jay Last remembered later. “Arthur pointed out to us that we could start our own company. It was completely foreign to us”…

[Rock] had tried to stand up for the eight scientists, but had succeeded only partially. What he had done, however, was to demonstrate that liberation capital was about much more than keeping a team together in the place where its members happened to own houses. Liberation capital was about unlocking human talent. It was about sharpening incentives. It was about forging a new kind of applied science and a new commercial culture.

The Power Law

I always thought “venture capital” was a fun name for an asset class and good branding, but “liberation capital” is really next level