| What made Silicon Valley the undisputed powerhouse of innovation and technology that it is today? According to Post contributing columnist Sebastian Mallaby, the answer isn't geography, or culture, or even a lucky streak in attracting talent. Instead, Sebastian argues in our latest Opinions Essay, the answer is finance. Because it was in the Valley some 60-plus years ago that a MBA named Arthur Rock helped lead a revolt of young electrical engineers out of one company and into a start-up backed by investors who were betting on little more than a hunch. The approach, called venture capital, was considered radical at the time. Decades later, venture capital remains the undisputed engine of the Valley's growth. Rock was in many ways the first to recognize that while most start-ups end up being worth zero, a handful take off exponentially – and more than make up for the losses of those that fail. "Venture capital is not even a home-run business," as an Uber investor put it. "It is a grand-slam business." The essay is adapted from Sebastian's new book, "The Power Law: Venture Capital and the Making of the New Future," which arrives amid growing public and government scrutiny of tech companies. But the way they are financed and nurtured remains unchallenged. As recently as a few years ago, 70 percent of the publicly traded tech companies in Silicon Valley could trace their lineage to Rock's first, long-ago start-up, Fairchild Semiconductor. Today, venture capital is a global juggernaut. "Venture-backed start-ups have changed how people work, socialize, shop and entertain themselves; how they access information, manipulate it and arrive at quiet epiphanies — how they think," Sebastian writes. Venture-backed companies "have delivered more progress in applied science than any kind of rival: more than centralized corporate research and development units, more than isolated individuals tinkering in garages and more than government attempts to pick technological winners." Expect to see more from Sebastian as his Post column resumes next month. Let me know what you think of the essay, and thanks for reading.  (Mario Wagner/For The Washington Post) Arthur Rock's bold approach to finance shapes modern life. By Sebastian Mallaby ● Read more » |    | | | | 
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