Talents’ Magnet

Crunchbase recently published an article about US unicorns with immigrant leaders.

Even though the article’s data set is limited, it is quite remarkable that the four most valuable private VC-backed US startups have immigrant founders:

* SpaceX, with a valuation of $100B, was founded by Elon Musk, a native of South Africa

* Stripe, with a valuation of $95B, was co-founded by the Irish brothers Patrick and John Collison

* Instacart, with a valuation of $39B, was founded by Apoorva Mehta, who was born in India and moved to Libya shortly after being born. The CEO Fidji Simo came from France

* Databricks, with a valuation of $38B, was founded by Ali Ghodsi, who was born in Iran and moved to Sweden as a child

A startup founded by Brazilians is also doing extremely well. Brex, created in 2017 by Pedro Franceschi and Henrique Dubugras, recently reached a $12.3B valuation. (Brex is an earlier Fabrica Ventures’ club deal).

The same pattern repeats in the public markets — four of the seven most valuable US companies are now headed by immigrants: Google, Microsoft, Nvidia and Tesla.

All the above companies, with the exception of Microsoft, were created in Silicon Valley. Obviously, talent holds no frontiers. So, why has the Valley been such a powerful magnet to attract talented people from all over the world? Why has the Valley been the place where the magic takes place?

Why in the US is the easiest question. The US has been the freest nation in the world for the last two centuries (even though there are heavy and dark clouds over the US soil nowadays).

Why in Silicon Valley is more difficult to answer. Some argue it is because of the culture, or better counterculture, which disdains organizational career ladders and mixes open-mindedness (of the pot-smoking hippies!) with workaholic focus. Others go back in history and find links to the materialism of San Francisco’s 19th century gold rush. No doubt Stanford played a major role, but one should have in mind that MIT & Harvard were much more relevant in the 1960s.

But if I have to pick a single main cause, I will say it is because the Valley was, by chance, the cradle of venture capital, with the forerunners Arthur Rock (the first “GP”), Sherman Fairchild (the first “LP”) and the Traitorous Eight (the first tech startup) in 1957 – a topic that I discussed before in the post “Living in Serendipity”.

After that, the network / cluster effect got a tremendous traction. “Silicon Valley is gripped by the cult of the individual. But those individuals represent the triumph of the network” – Matt Clifford.

Conclusion

Fabrica Ventures is located in the Valley to tap top-talented tech entrepreneurs and venture capitalists in order to connect them to talented Brazilian investors.