How Venture Capital Made the Future

LIBERATION CAPITAL," AS investor Arthur Rock called it, "was about much more than keeping a team together in the place where its members happened to own houses." In 1957, Rock took a gamble on the "traitorous eight"-a team of promising engineers at Shockley Semiconductor Laboratory-and counseled them to free themselves of their authoritarian boss by quitting en masse and striking out to form Fairchild Semiconductor.

- LIZ WOLFE

The Power Law: Venture Capital and the Making of the New Future, by Sebastian Mallaby, Penguin Press, 496 pages, $30

Rock was an amalgamation of consigliere and connector. He helped the group secure funding, cementing his place in history as the father of modern venture capital, which offered an alternative to stuffy East Coast financial institutions that were leery of lending to tech ventures they perceived as risky.

In The Power Law: Venture Capital and the Making of the New Future, journalist Sebastian Mallaby draws on interviews with scores of high-profile venture capitalists (V.C.s)-and other sorts of reporting, including four years of sitting in on firms' meetings-to tell the story of Rock's new paradigm: a form of financing that centers on funding high-risk, high-reward companies in their early days. Mallaby, who similarly embedded himself in the world of hedge funds when writing his 2010 book More Money Than God, smartly details the well-placed V.C. interventions that produced technologies too many industry critics take for granted today.