Most highly ambitious business ventures fail, but the ones that succeed can make billionaires of their early investors. Just look at the most valuable companies in the world today, many of which began as tech startups just a few decades ago. Venture capital firms, by providing early-stage financing for startups, have been conspicuous players in the rise of Silicon Valley since the beginning. But are top VC firms just lucky gamblers, or do they provide a real service to the companies they back? To find out more, I'm joined by Sebastian Mallaby.

Sebastian is the Paul A. Volcker Senior Fellow for International Economics at the Council on Foreign Relations and author of "The Power Law: Venture Capital and the Making of the New Future."