Empowering India’s lower castes.

At the risk of straining your sympathy, I am about to stand up for Silicon Valley venture capitalists. The industry is not nearly as insufferable and out of touch as some of its blustering online influencers might lead you to believe. And despite its recent troubles, the world continues to need places like Silicon Valley and its financiers of risky ideas.

When Silicon Valley Bank was taken over by the Federal Deposit Insurance Corporation, some of the start-up world’s best-known voices — or, at least, its most aggressively online voices, several of them venture capitalists — swarmed Twitter with demands for a full federal bailout of the bank’s customers.

Whatever the economic merit to making the bank’s depositors whole, the venture capitalists’ sky-is-falling rhetoric did seem a bit hypocritical. Some of those most clamorous for government intervention in the bank, like David Sacks of Craft Ventures, have often aligned themselves with Peter Thiel’s brand of fair-weather libertarianism. When it was their industry’s money at stake, though, the long arm of the government apparently looked a lot more comforting.

Writing in Slate, Edward Ongweso Jr. argued that their Twitter “tantrum” over Silicon Valley Bank offered “a glimpse into how reckless venture capitalists are in pursuit of something they want, so long as it doesn’t bear any risk to them.”

Ongweso uses those tweets about the bank’s collapse as an indictment of the entire venture capital business, questioning its essential utility to America’s economy and society. As he and other critics note, it is an industry that talks a big game about embracing innovation but has tended to operate as a clubby network of mostly white dudes given to herdlike bets on similar ideas. It often props up businesses that profit a few — as with crypto and the gig economy — but rarely prioritizes broad social or economic utility. And it has grown its fortunes in unusually fertile ground: more than a decade of low interest rates that sent hundreds of billions of easy money sloshing into its coffers.

But there is a risk in vilifying the machinery of Silicon Valley based on its noisiest personages in its most frothy times. And while there are lots of flaws in the venture capital model, I also wonder if it is a bit like that quip about democracy attributed to Churchill — maybe Silicon Valley is the worst way to fund inventions except for all the others.

After all, for all its faults, Silicon Valley has for decades been among America’s most valuable economic assets. Along with research funding and other subsidies by the government, it is one of the primary reasons the United States maintains global technological supremacy. It has also produced genuine advances that have improved our lives; from Zoom to Slack and even to gig-economy companies like DoorDash, the entire work-athome apparatus that held up much of the economy through the pandemic was built on the back of venture capital.

And while Americans might be burned out on technology, they cannot remove the need for new things. To address some of humanity’s biggest challenges — climate change most pressingly — we will need venture capitalists to fund the best and riskiest ideas. Those firms are financing the research into next-generation batteries, new forms of energy and other ways to mitigate global warming.

Among Valley investors, Twitter-addled figures like Sacks and the angel investor Jason Calacanis are far from the biggest names in town. Though they have a large presence online, they mostly invest millions or tens of millions of dollars at the earliest stages of companies; they are hardly emblematic of the Valley’s largest venture firms, which have raised and invested tens of billions of dollars over the years.

Many top venture capitalists did not spend the days after the bank’s collapse tweeting furiously. Some in the industry instead circulated a more sober and substantive letter to officials outlining the risks of contagion. Others I spoke with were also doing what venture capitalists are supposed to do — guiding lots of young, fragile companies through a sudden crisis that they were unprepared for.

You could call this clubby and herd-like, but you could also call it the secret to Silicon Valley’s success. One reason Silicon Valley works is that it collects expertise and institutional knowledge, learns from failures, and feeds those insights to succeeding generations of companies. That sort of guidance is exactly why many start-ups are likely to survive their bank’s blowup.

Jessica Lessin, the founder and chief executive of The Information — a publication that covers the start-up world and is itself a start-up whose money was tied up in Silicon Valley Bank — pointed to something that many have noticed: Silicon Valley now faces more serious scrutiny than it used to, and it does seem to be learning from its mistakes.

I have been struck by how Sam Altman, the head of the ChatGPT inventor OpenAI, is much more careful when talking about artificial intelligence than Mark Zuckerberg was when talking about social networking at the dawn of Facebook. Zuckerberg peddled his invention as indisputably good for humanity. Altman, meanwhile, says that while A.I. can be transformative, he is “a little bit scared” of how it could be misused by authoritarian governments and how it might affect politics and the economy, and his company keeps that fear at the forefront when building its tech.

“There was a period about 10 years ago where tech wasn’t getting any scrutiny — it was all hype,” Lessin said. But we are now well “beyond the days of celebrating every new thing that has an app,” she added, noting that what is important now is focusing on the right problems. And venture capitalists might help solve them.

The tech industry is far from perfect, but it remains essential.