Paul Graham’s essay Startup = Growth argues that the Silicon Valley ‘startup ecosystem’ – the angels, the VCs, the exits, the risk – inevitably follows from a network of fast-growing companies, much like how wells and pipelines inevitably follow new oil discoveries. But to what extent is that really true?

One easy test is comparing Valley companies to the rapidly growing companies of the 1800s. I don’t yet know enough history to do a comprehensive side-by-side, but one critical difference seems to be the idea of “IPO”. Before the SEC, there was a smooth continuum from “sole proprietorship” to “public company”. (The term “initial public offering” itself appears to have been coined in the 30s.) Today’s environment is binary – either you get acquired and keep none of your stock, or you win big, go public and keep almost all of it. There’s no option in between; Facebook won’t buy 60% of your new social mobile app.