Venture capital’s big bang was the moment scientists became owners

Owners have more momentum than employees. They are driven by pride, agency, intention, hope and fear.

When scientists become owners, incredible impact is possible.

Venture capital was created to unleash this power

It is easy to think of venture capital as a digital-first execution game, but it began in a way that is much closer to our work today in deep-tech venture building.

Audacious ideas, born in a lab, un-fundable by banks, suffocated by research environments, capable of massive returns if the impact plays out.

Sebastian Mallaby wonderfully tells this story in The Power Law — Venture Capital and the Art of Disruption.

It begins with eight frustrated researchers and a broker called Arthur Rock.

The liberation of the ‘Traitorous Eight.’

Fairchild Semiconductor was founded in 1957 when eight researchers were frustrated with a suffocating environment at Stanford University. They decided to start something themselves and met with Arthur Rock to discuss funding. He suggested they create their own company and own it between them.

In his book, Mallaby calls them the ‘Traitorous Eight’. They each made a pact by signing their names on dollar bills and set to work raising capital. When the company was founded, each founder owned 10% of the new company.

They set to work with a loan of $1.4m from Sherman Fairchild.

Two years later, the company was pushing scientific limits at a pace that Stanford would have resisted and had $6.5m of orders.

Today this is common

Two years after spinning out of a university, fuelled by venture capital and the power of ownership, companies are delivering impact that their institutions have told them was impossible.

🖖🏻 I’m building out loud. [Subscribe here](https://philmorle.medium.com/subscribe) or follow me @philmorle

Read this post and more on my Typeshare Social Blog

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Phil Morle

Phil Morle

Deep tech VC — Main Sequence Ventures. Ecosystem builder. Maker. Director. Startup Scientist.