But there are other, larger lessons to glean as well. As you’ll learn in this book, most venture firms invest money on behalf of larger institutional asset managers, like university endowments and retirement funds. Most of these asset managers use a formula to determine how much money to allocate to different types of investments, including the high-risk, highly-illiquid sector of venture. (This approach to portfolio construction was pioneered by David Swensen at Yale, whose methods have been widely adopted, as you’ll read about in chapter 2). What that means is that the amount of resources our society currently invests in innovation is based on the percentage of assets that need to be invested according to this formula, rather than on the number of investable opportunities that exist. When too much money is chasing too few deals, there’s only one possible result: Because we have too few entrepreneurs, we can’t put enough money to work. Instead, it’s wasted on bidding up the prices of the few available assets rather than funding the kinds of organizations that are actually needed. The problem is even more pressing when you consider it from a diversity point of view. Not only are there not enough startups, but the ones that do exist aren’t nearly wide-ranging enough to build the kinds of companies our present and future call for. Possibly for the first time in history, we’re talent-constrained instead of capital-constrained. Scott’s book is an important step in making the opportunity to build a venture-scale business available to everyone so we can change that. The information about how to seek out and secure funding shouldn’t be limited to an elite club. Every startup is about a single idea, but taken together, all startups have a common purpose as well: to shape a better world for all of us. And a better world is one in which everyone is represented and served well by the companies and systems we create.