This Cato study examines wealthy people funding startup businesses. Since the early industrial revolution, angels have been investing in highly risky businesses that financial institutions such as banks won’t touch. Most such investments fail, but angels occasionally launch a revolution.

Steve Wozniak is one of the heroes of America’s high‐tech boom. He designed the Apple 1 and 2 computers and co‐founded Apple Computer with Steve Jobs. In the Cato study, I note that Mike Markkula was the angel who gave young and broke Wozniak and Jobs the money to launch their pathbreaking firm.

So I was interested to find this 2011 interview with Wozniak describing the importance of Markkula. At 15:54:

The story of Apple is a little misunderstood because it’s like Steve and I did it ourselves. And really, with the Apple 2 computer, we got funding. A guy funded us, an angel. And he joined us. He had made his money working in marketing at Intel and as an engineer before, and he was a mentor. He was kind of young, but he was wealthy and he owned as much of Apple as Steve and I did. Same amount of stock.

Mike Markkula was his name. And he ran our marketing, but he was our mentor. He told us how we would organize the company—what Steve’s roles would be, what my role would be. So he was really more responsible for Apple’s success than anyone.

[Markkula] kind of lays out of the picture because Steve and I came from nothing. We had no savings account. We had no relatives or friends who could loan us money. We just had this drive, we wanted to build this computer, wanted to find a way to sell it. And for a while, we were getting the parts on 30‐day credit, with no money, and we built the computers in 10 days and sell them for cash at the store. So that was how we ran for a good year with the Apple 1 computer because we had nothing ourselves.

Wozniak touches on aspects of innovation that I cover in my study, such as startups being financially lean and the resistance of established firms to new approaches. Wozniak offered the Apple 1 to his employer, Hewlett Packard (HP), and they turned him down. And, as Wozniak notes, even if HP had built his machine, it would have been too expensive. Apple Computer was classic disruptive innovation.

Unfortunately, U.S. policymakers are shifting our economy away from the environment that spawned Apple and many other great tech companies. Recent federal laws have embraced subsidies and central planning over private funding and decentralized innovation.

Markkula allocated capital to Jobs and Wozniak, and in turn Wozniak has allocated his capital to many other new enterprises. It is a big mistake, as Andy Kessler notes, to scrap this system for a top‐down approach where the “lobbyists allocate capital” for our technology industries.