The Power Law

From an award-winning financial historian comes the gripping, character-driven story of venture capital and the world it made Innovations rarely come from "experts." Jeff Bezos was not a bookseller; Elon Musk was not in the auto industry. When it comes to innovation, a legendary venture capitalist told Sebastian Mallaby, the future cannot be predicted, it can only be discovered. Most attempts at discovery fail, but a few succeed at such a scale that they more than make up for everything else. That extreme ratio of success and failure is the power law that drives venture capital, Silicon Valley, the tech sector, and, by extension, the world. Drawing on unprecedented access to the most celebrated venture capitalists of all time, award-winning financial historian Sebastian Mallaby tells the story of this strange tribe of financiers who have funded the world's most successful companies, from Google to SpaceX to Alibaba. With a riveting blend of storytelling and analysis, The Power Law makes sense of the seeming randomness of success in venture capital, an industry that relies, for good and ill, on gut instinct and personality rather than spreadsheets and data. We learn the unvarnished truth about some of the most iconic triumphs and infamous disasters in the history of tech, from the comedy of errors that was the birth of Apple to the venture funding that fostered hubris at WeWork and Uber to the industry's notorious lack of women and ethnic minorities. Now the power law echoes around the world- it has transformed China's digital economy beyond recognition, and London is one of the top cities for venture capital investment. By taking us so deeply into the VCs' game, The Power Law helps us think about our own future through their eyes.

“Venture capital has influenced the American economy for over half-a-century now, and finally we have a book of exceptional reporting, analysis and storytelling to bring that history to life. What makes Sebastian Mallaby's The Power Law a classic is how deeply it takes us into VC's defining successes and failures - which are much harder to get anyone to talk frankly about. I'm not sure this is the book of VCs' dreams, but it's what the rest of us have been waiting for”

Mallaby, an astute chronicler of modern capitalism, [...]writes with humour and historical sweep... His account is immensely enriched by interviews with most if not all of the rainmakers in venture capital -- Lionel Barber Prospect
Sebastian Mallaby has done what many people would have thought it impossible to do: write a gripping book about the modern history of venture capital... Well-argued and compelling... A superb introduction to an important subject -- Paul Seabright TLS
[An] entertaining history... If you want to understand a world in which a handful of coders became richer than most countries, this is an invaluable guide -- Sam Freedman Sunday Times
In his well-researched book, leavened by lively portraits of leading figures, Mr Mallaby explores the history of the VC industry and the reasons for its vitality -- John Thornhill Economist
Thoroughly magnificent... Seriously great, and wildly important... It would be difficult to find a more important book than Mallaby's in 2022, and most any year for that matter -- John Tammy Forbes
Sebastian Mallaby sets off into the world of venture capital and the strange bunch of financiers behind some of the most successful companies. It's a tale of triumphs but also major failures, hubris and jaw-dropping eccentricity -- 'Books to look out for in 2022' Financial Times
[An] absorbing new history of startup investing -- Liam Proud Reuters
[Mallaby] brings his trademark mixture of exhaustive research and clear analysis to his most interesting subject so far -- Adrian Wooldridge Bloomberg
Venture capital has influenced the American economy for over half-a-century now, and finally we have a book of exceptional reporting, analysis and storytelling to bring that history to life. What makes Sebastian Mallaby's The Power Law a classic is how deeply it takes us into VC's defining successes and failures - which are much harder to get anyone to talk frankly about. I'm not sure this is the book of VCs' dreams, but it's what the rest of us have been waiting for -- Charles Duhigg
A fascinating journey through the tightly networked world of the venture capitalists who make Silicon Valley tick, from the scrappy dealmakers of the 1960s to the high-flying global investors of today. Filled with eye-opening case studies and vivid personalities, frank in its analysis of the industry's greatest strengths and most dangerous blind spots, The Power Law is essential reading for understanding our tech-driven economy and where it might go next -- Professor Margaret O’Mara, University of Washington
As we face urgent man-made existential challenges from climate change to economic inequality, Sebastian Mallaby shows that the capitalists of Silicon Valley are shaping the future in ways few understand. In The Power Law he takes us inside their rarified world, showing the possibilities and shortcomings of their big egos and big bets. Mallaby's deep access enables us to get a rare and unsettling look inside a subculture of unparalleled influence -- Jane Mayer, Chief Washington Correspondent, The New Yorker
If you can read only one book on venture capital, this is the one. The Power Law narrates the evolution of venture capital from its origins in Silicon Valley to its emergence in China by following the ambitious and often idiosyncratic investors who finance risky new ventures while recognizing that success is rare, but transformative. The book is a fascinating read, and illustrates well one of its core themes, that venture capital is a network that straddles and offers the virtues of both markets and corporations -- Professor AnnaLee Saxenian
This book is a powerful combination of careful research and great storytelling. Sebastian Mallaby portrays many of the world's most successful venture capitalists but also shows how the industry has evolved and why it has become a major source of innovation in our economies. Highly informative and fun to read -- Baroness Minouche Shafik, Director of the London School of Economics and Political Science
Everyone talks about venture capital. We glorify it, we vilify it, and everywhere outside Silicon Valley envies it. At last we have a storyteller with the intelligence to understand venture capital, the diligence to dig out some astonishing tales, and the eloquence to make the journey of discovery such a pleasure. This is a superb book -- Tim Harford, author of HOW TO MAKE THE WORLD ADD UP
In this fascinating study of venture capitalists, Sebastian Mallaby explains why they invest with the sole purpose of winning the jackpot while the rest of us are advised to invest cautiously. A compelling story of flesh and blood financiers, sprinkled with insights from which all economists could learn -- Mervyn King, former Governor of the Bank of England
Heavyweight and richly detailed, [The Power Law] is both a careering ride through the chaos of startup culture and a sober assessment of how the relationship between founders and their financiers has evolved -- Mike Jakeman Strategy+Business
A must-read for anyone seeking to understand modern-day Silicon Valley and even our economy writ large... Phenomenally detailed and engaging -- Bethany McLean Washington Post
A gripping fly-on-the-wall story of the rise of this unique and important industry based on extensive interviews with some of the most successful venture capitalists . . . Mr. Mallaby writes a fast-paced narrative. He also has a journalist's eye for revealing details -- Daniel Rasmussen Wall Street Journal
Sweeping and authoritative . . . tells an undercovered tale Financial Times
Sebastian Mallaby is the master of unspooling human drama from financial systems. Here, the venture capitalists are the protagonists. Whether it's financiers scrambling to court a pajama-wearing young Mark Zuckerberg or venture capitalist Bill Gurley's efforts to oust Uber founder Travis Kalanick from the company, the stories are almost Shakespearean in their depictions of ambition, jealousy and ego NPR Books

Sebastian Mallaby is the author of several books, including the bestselling More Money Than God and The Man Who Knew- The Life and Times of Alan Greenspan , the winner of the 2016 Financial Times /McKinsey Business Book of the Year Award. A former Financial Times contributing editor and two-time Pulitzer Prize finalist, Mallaby is the Paul A. Volcker Senior Fellow for International Economics at the Council on Foreign Relations. He lives with his family in London.

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