BY STEVEN M. DAVIDOFF
With the rocketing valuations of social media companies, there is again hope that our economy can compete globally. The hope belies a sobering reality. Governments cannot create or even know what will be the next great entrepreneurial success. The Web’s latest hits show the pitfalls of such efforts.
Facebook, Groupon andTwitter are successes backed by venture capital at an early stage.
These companies had a timely idea, but entrepreneurial efforts and vision may have carried them to fortune. It was not just the founders, but advisers, employees and other companies that helped stir this creative spirit. Investors and advisers like lawyers exist side by side with gaggles of venture capital-financed companies and their most important resource: talented, innovative employees.
These networks have been a crucial driving force for venture capital. There are few successful venture capital communities in the United States. Silicon Valley is the one everyone knows, but Austin, Tex., and Boston are also prominent. Other emerging venture capital communities are in Boulder, Colo.; Chicago; and New York.