We Are Bullish on the Future of Venture Capital

We’re bullish on the future of venture capital. For anyone who thinks the greatest innovations are behind us and questions how much is still left to invent, we would argue that the greatest days of innovation and hence of venture capital opportunity are still to come.

. . . The tools and technologies that are rapidly emerging will be much more powerful and useful than much of what we’ve seen to date. Think about computers and information technology as an example. When the authors were in college, a computer filled a large room, generated so much heat that it required costly air conditioning, and yet had far less power than today’s typical smartphone we all carry around.

Moore’s Law has changed all of that, enabling the modern digital revolution. In 1965, Gordon Moore, the co-founder of Intel, observed that the number of transistors per square inch on integrated circuits had doubled roughly every year since their invention. Based on that observation, he essentially predicted that computing would double in power roughly every one to two years as well. That prediction, of course, was prescient and anticipated the massive increases in computing power that we all enjoy today.

Similarly, we have seen awesome advances in medical and biotechnological capabilities over the past 10, 20, 30 years. The mysteries of our genomics have been solved, and a result has been the ability to tailor lifesaving drugs to specific genetic problems.

. . . We could go on and on, but the point should be clear—we are already enjoying the benefits of technological advances we could not have imagined 50 years ago. Foreseeing enhancements to present known and working technologies and their future combination and integration into more complex forms provides a window on the opportunity for even greater technological innovations in the years to come.

Importantly, the advances already upon us and behind us represent a technological infrastructure enabling and facilitating future advances. Further advances, as they accrue, will enrich that technological infrastructure even further, enabling advances at a logarithmic pace in many fields. Moreover, entrepreneurs in most fields of technology will be helped further by advances in information technology—software and Internet technology—already behind us. Those advances in information technology will enable knowledge to be built and disseminated more effectively and efficiently than ever before, bringing down the costs of initial startup requirements and shrinking their development timelines.


Len Batterson is the co-author of:
Building Wealth through Venture Capital: A Practical Guide for Investors and the Entrepreneurs They Fund