Every Generation of Venture Capital Has a Mission: Create a New Era

I see VC as deeply influential, yet still young and continually changing. Even in its birthplace, America, it has less than eighty years of history. In 1946, Harvard Business School professor Georges Doriot established American Research and Development (ARD), the first venture firm, raising US$3.5 million to invest mainly in innovative companies developing new technologies. VC has since advanced scientific breakthroughs, technology, and business innovation. Almost every major US technology company has benefited from it. VC helps America keep moving the world forward; Silicon Valley itself was nurtured by investors and entrepreneurs together. VC’s role in the innovation ecosystem is critical, and its influence is disproportionately large relative to its capital. Compared with stocks, fixed income, or real estate, it is tiny, classified at most as an alternative investment. The entire industry’s capital may not match a small or mid-sized investment trust company’s assets under management. Yet its economic contribution is immense. The Wall Street Journal has even called it ‘humanity’s last hope.’ Wharton professor Ethan Mollick is quoted: ‘Without venture capital’s support for startups, US economic growth would be 28% lower.’ In Silicon Valley, VC is far more than funding: it shapes an innovation ecosystem. If that ecosystem is an Amazon rainforest, as President Lai Ching-te has described it, VC is its interwoven river network, nourishing its elements and accelerating evolution. VC carries entrepreneurial dreams, whose pursuit is inevitably turbulent. A few celebrated successes stand on many failures. Practitioners repeatedly lose investments without easily surrendering confidence or hope. Bruised and battered, they accept their era’s mission, bandage wounds, and move forward. Bad investments and missed opportunities refine judgment, making VC a force carrying one era into the next. Government created ITRI fifty years ago to drive industry through research and introduced VC forty years ago to support innovation. Those policies laid foundations for science parks, semiconductors, electronics, and today’s AI boom. Taiwan’s fifty-year transformation from petrochemicals, steel, and textiles to globally influential technology required policy, entrepreneurship, VC, and capital markets together. The development of the country, industries, companies, founders, and VC is tightly interwoven. This year marks Taiwan VC’s fortieth anniversary. The association has planned activities and publications to recall those decades. We look back for inspiration and direction from earlier generations’ responsibilities, successes, and failures. Each generation’s mission is to create a new era. Our predecessors laid foundations forty years ago; looking forty years ahead, we must create Taiwan’s next industrial landscape. Threats and challenges lie ahead, but opportunities are greater. At this turning point, VC must fulfill its historical responsibility through innovative, risk-taking investment. Together, let us use innovation and investment to build a better, more competitive Taiwan.