The Ecosystem

Inside the capital of capitalism.

I have been convinced that investing in venture capital is a good idea for a while. But stepping into the Silicon Valley ecosystem for a few days changed my perspective. It’s far more extraordinary, historic, and critical to our economic future than I appreciated.

Leo is one of the thousands of impressive, motivated founders that exist in that ecosystem. Leo is working on a problem that any trial attorney will recognize: How will a jury respond to my case? Mock juries can help attorneys test their arguments and evidence before entering a courtroom. But assembling people, presenting a case, and evaluating their reactions takes time and a lot of money.

Leo’s family immigrated to the US when he was young, he was a champion chess player as a teen and graduated from a magnet high school in New York. He earned a Stanford PhD in psychology and spent roughly a decade working at the interface of human behavior and technology. Leo’s idea is to use thousands of AI-generated personalities to create simulated juries, giving attorneys a faster, less expensive way to explore how different people might respond. The early results and industry interest is very promising.

I met Leo during my recent visit to San Francisco and the Bay Area for a venture capital fund annual meeting. I serve as general partner of a venture capital access fund. The access fund is simply a vehicle that allows qualified investors to invest in institutional venture funds with smaller commitments than the typical $1 million to $5 million dollar minimum. It is access for those who normally would not have it.

The trip included time on Stanford’s campus, lunch on storied Sand Hill Road, and time with other investors including large family offices. Even more enlightening was time with a Stanford based VC fostering young talent and aspiring founders, funding them and plugging them into her network. More on her in a bit.

The schools, big tech firms, VC firms, and founders have organized into an extraordinary system for turning ideas into businesses, matching talent and innovation with funding. When the businesses succeed, the beneficiaries feed back into the system compounding the swell of innovation and resources that seed the next generation of innovation.

There is nothing like it in the world. It has surpassed the economic and technological impact of the 1900s New York centered industrial revolution. With AI’s unprecedented contributions, Silicon Valley will be the most concentrated center of wealth in all of history. The companies and players will increasingly gain influence in culture, art, education, transportation, and fund the human expansion into space.

It’s big, historic, and accelerating. I was convinced of all of this before this trip, but being in it and experiencing the ecosystem was eye-opening. In particular, three things stood out.

First, the scale deserves investors’ attention.

According to the Q3 2026 Pitchbook–NVCA Venture Monitor, U.S. venture investment reached $515.8 billion through September 2026. In the third quarter alone, approximately 5,012 deals attracted $98.4 billion. To compare, the US IPO market (newly listed public companies introduced on the stock exchanges) was about $120 billion, and $75 billion of that was SpaceX.

Behind those totals are thousands of attempts to solve problems. Collectively, they represent a substantial commitment to businesses and technologies that could shape the economy we will invest in for decades.

Funding gives those attempts time to develop. It pays for engineers, research, computing, customer testing, and the mistakes that accompany building something new. The money does not guarantee success, but the resources being committed to these experiments are substantial and will produce many more big winners.

Second, this ecosystem is an engine for turning innovation into businesses.

Handing young entrepreneurs millions of dollars expecting a lot of failure is not how innovation was fostered historically. Bell Labs gave us the transistor in 1947, through research conducted by Bell employees and funded by Bell. Defense Department funding supported ARPANET, the research network that became a foundation of the internet. Universities have supplied discoveries and trained generations of researchers. Companies, governments and universities are still sources of talent and innovation and problem solving, but they by default limit the pursuit of innovation to what is in the institution’s interest. In addition, those are closed systems. None of them would pursue the problem Leo is working on.

The venture ecosystem brings these sources of discovery together with people willing to build independent companies. A founder can assemble a team, attract investors, and pursue an idea before an established business or commercial market exists to support it. The funding and resources are from the ecosystem, not limited to a few gatekeepers.

Anthropic is a striking example. In May 2021, it announced $124 million in initial financing to support research into more reliable AI systems. Its backers included Skype cofounder Jaan Tallinn, Dustin Moskovitz, and Eric Schmidt—people whose experience and resources connected earlier technology successes to a new undertaking.

Leo is pursuing that same path on a different scale. His route is to persuade investors to risk their capital alongside his time and effort. Those investors have a reason to help: if he builds a valuable business, they share in its success. Their relationships and experience can matter alongside the money.

Third, the ecosystem renews itself.

Sarah Smith brought Leo to the meeting. She is an emerging venture capital fund manager. Her career helps explain how the system works. She was an early employee at Facebook and Quora, became a venture investor, and now runs her own fund. She also teaches entrepreneurship at Stanford, where students clamor to get into her class. She connects several parts of the ecosystem: operating experience, investment capital, university talent, and founders.

Successful companies produce people who know how to recruit, build products, find customers, and manage growth. When their equity becomes liquid, some also gain the financial resources to back another generation. They become founders, investors, advisers, or teachers.

The pending Anthropic exit could give another generation the resources to do the same.

This ability to renew itself was my most important realization. Each successful generation can make the next one better equipped. Sarah is already putting her experience to work for founders like Leo. If he succeeds, he may eventually do the same for someone else.

The regeneration has been compounding for decades and is unlikely to be recreated elsewhere. Silicon Valley is uniquely American in its risk-taking free-enterprise swagger. It has become the capital of capitalism, a place where ambitious ideas can attract resources, and success can finance what comes next.

The system has flaws. Capital can chase fashionable ideas. Prices can outrun business prospects. Companies fail, investors lose money, and important problems remain without a profitable solution. An extraordinary innovation engine can still produce a poor investment at the wrong price.

Still, spending time with the people doing the work strengthened my confidence in the engine. I left San Francisco with greater conviction that this ecosystem deserves a deliberate place in our investment thinking. At its best, it is seeding contributions to our future and encouraging young motivated talent to solve hard problems.