Born in New York, nurtured in Boston, and almost smothered in Washington, venture capital did not really come of age until it moved to California and joined forces with the brash young technologists who were using bits of silicon to create an information revolution as profound as the industrial revolution a century earlier. The bucolic Santa Clara Valley was an unlikely place for a revolution but it had two important attractions for the new breed of scientist-entrepreneur: nice weather and Stanford University. Frederick Terman, Stanford’s legendary engineering dean, encouraged his best students to stay int he area, and the balmy weather persuaded some of them to take his advice. A small electronics industry began to coalesce around the university before World War II, and in the post-war years a venture capital community took root in San Francisco, thirty miles to the north. By the late 1960s, the combination of technology and risk capital had snowballed into a phenomenon known around the world as Silicon Valley — a center of entrepreneurship so powerful that officials from Bonn to Tokyo would wonder how to emulate it.
— John W. Wilson, The New Ventures