Plenty Ventured, Little Gained

Josh Gabert-Doyon reviews The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby.

Venture capitalists have had a tough run in recent years. Take, for example, two new TV series parading some of their biggest failures— WeCrashed, on the disgraced co-working startup WeWork, and The Dropout, dramatizing Theranos, Elizabeth Holmes’s phony blood-testing company. The fraudulent dealings of WeWork and Theranos have become cultural touchstones in a moment where the tech industry appears more suspect than it does promising. And both brands are deeply emblematic of the shortcomings of the VC model, which rewards outlandish, half-baked business ideas by taking them to a Build-a-Bear Workshop and blowing them full of cash.

These are shortcomings that Sebastian Mallaby, a Washington Post columnist and Council on Foreign Relations fellow, earnestly hopes to dispel in his new book The Power Law. In it, Mallaby offers a defense of VC investing: an attempt to cast it as a highly skilled profession that maintains a watchful eye over Silicon Valley, tempering greed, making sweeping strategic plays, and mediating handily between market forces and eager entrepreneurs.

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