Q&A with decacorn entrepreneur Dan Caruso

Dan Caruso (’86, B.S., Mechanical Engineering) is a catalytic venture investor and author of “Bandwidth: The Untold Story of Ambition, Deception, and Innovation that Shaped the Internet Age and the Dot-Com Boom.” During his extraordinary career, Caruso has built and scaled industry-defining companies with valuations surpassing $10 billion, earning him distinction as a three-time decacorn entrepreneur.

In 2020, he co-founded Caruso Ventures, a prominent investment firm focused on supporting cutting-edge breakthroughs in frontier technologies such as quantum, deep space and advanced energy.

Caruso’s long-term support of the Landuyt Center for Entrepreneurship and the Cozad New Venture Challenge has created an enduring impact on entrepreneurial education at The Grainger College of Engineering and the University of Illinois Urbana-Champaign. In 2021, the college honored Caruso with The Grainger College of Engineering Alumni Award for Distinguished Service.

Caruso came to the U. of I.  for Founder’s Week 2026 and sat down with Grainger Engineering Dean Rashid Bashir for a fireside chat.

To start us off, take us back to the time when you were a student in mechanical engineering. How did the engineering education here set the foundation for your career as a tech executive and an entrepreneur, and what did you learn here that helped you later?

Well, what I learned is that the University of Illinois engineering school was really hard to get into when I applied. It was so hard to get into that it didn't accept me … I also learned I’m pretty stubborn because I decided that I wanted to be in engineering school. … So, I didn't join a fraternity, but I did study a lot. … And I did get transferred into engineering. …It taught me to work really hard and to develop some confidence. Having the success of getting in was great.

Then I developed a lot of curiosity, a lot of discipline, a lot of wondering about what the world was really all about.

You also have an MBA from University of Chicago. How did the MBA help you in your later career, and is that something you recommend to students if they have the appetite for it?

I don't know if I’d necessarily recommend it because I think it’s an individual journey. But for me, it worked. … And I left it with a much more thorough understanding of the fundamental nature of business — what really is value creation, what really is a competitive advantage.

Too often, startup founders focus on their pitch decks and their story. But sometimes founders confuse the story with the substance that creates durable value. Stories usually lead to a really bad outcome if they're not backed up by the substance of what founders are really building.

You've built and led companies through really monumental shifts in technology over the decades, from early fiber optic to current venture investments. As you look ahead, how do you define this next tech frontier, and what should entrepreneurs spot during these generational shifts?

Photo Credit: Canaan Daniels

This is one of those unique times in history where so many different technologies are converging together to change everything with AI being certainly a common thread throughout. The interplay between these different technologies is where the compelling ideas will emerge. It's not any one of them by itself. It's two, three, four of them working together to innovate in ways that are hard for us to even contemplate today.

… If you’re looking to have kind of a long, interesting, compelling career, which I assume most people are, make sure you're positioning yourself where you're looking across multiple of these just gigantically changing technology trends, technology developments, that are taking place. I don't think there's a wrong one in the bunch, frankly.

I think whether your approach is pure AI, whether it’s quantum, whether it’s space, whether it’s biotech, whether it’s energy, I think all of these are going to play a gigantic role going forward.

One of those technologies is quantum. Quantum is moving from theoretical physics to practical applications and commercial deployment through Caruso Ventures and Elevate Quantum. What key breakthroughs are you seeing in quantum computing and sensing, and how do you think quantum will redefine future global industries?

One of the most interesting things about quantum is that there remain fundamental discoveries that will happen in the field. We take a leap of faith that we understand quantum as the human race. And we understand a lot better now than we did 20 years ago or 50 years ago. But there's still whole aspects of quantum and what it really means and how it really exists in our everyday world that we don't know.

... But at the same time that we're grappling with the fundamental questions of what quantum really means, we are engineering real-world devices that are based on quantum technology. And I personally think quantum computers will solve problems that are meaningful and impactful inside of four years, maybe inside of three years. ... And when that starts to happen, who knows where innovation goes from there?

Let's talk about your book a little bit. “Bandwidth: The Untold Story of Ambition, Deception, and Innovation that Shaped the Internet Age and the Dot-Com Boom” was published in 2025. One of the key points is this idea of infrastructure and innovation. Do you correlate what you wrote in the book to what's happening now?

Boom and bust cycles repeat themselves. And one of the characteristics of the really big boom cycles is that everyone was right on taking kind of the same side of a bet. We all thought the internet was going to change the world. And guess what? The internet changed the world. We all thought fiber optics was going to be the workhorse of the internet, and it was. What was taking place was so overwhelmingly obvious that investors didn't want to be left behind. And that fed the boom that then led to the bust.

Today, the one-sided bet is that AI will change the world. However, I personally think that we're not on the cusp of a bust cycle. It's not imminent.

Let’s talk about space. It’s experiencing a massive expansion moving beyond government programs into commercially backed venture enterprises.  

Everything we're developing in space [for] military purposes ... could be used for a wide range of commercial uses — everything from helping to fight fires to seeing where to search for valuable minerals buried hidden deep underground. Then when you match quantum and space together with AI, you're going to be opening whole other realms of what to build businesses around.

There are tremendous opportunities. What are your thoughts on data centers in space?  

One thing you have to have before you have data centers in space is companies that can take data center equipment up to space. And it turns out the two biggest advocates for data centers in space are Elon Musk and Jeff Bezos and both own rocket companies. Think that's a coincidence? I'm a little more skeptical about the near-term prospects of that, especially after being with you yesterday and this morning and seeing what you're doing on campus here with energy, because the biggest drive to having data centers in space is energy.

You're invested heavily in quantum and have had success already. Illinois has put a big bet on quantum, the Illinois Quantum and Microelectronics Park that Grainger Engineering and the U. of I. are leading. How can these different hubs across the country work together? What can we learn from Colorado? How do you think this should proceed nationally? 

Quantum is a matter of national security. At this stage of quantum, we need huge collaboration between geographies, including internationally.

“The key to continuing to advance the world is using the forces of creation, of innovation, to keep moving things forward.”

 — Dan Caruso

Every geography wants to have its own quantum hub and quantum activity. But when you go and meet with people who are in the quantum world, they want to work with one another. And one another isn't defined by exactly where a company is or what geography they relate to, including a lot of international cooperation in how to advance quantum. Quantum is going to be cutting across everything.

Probably the most profound things that quantum will do is stuff we can't articulate today. This is one of those clear bets on the future for our geography — to get ahead of a technology that's going to be here for decades to come.

Can you talk about the mindset of the founder, either yourself or what you look for when you invest? 

I'm glad you asked that because now I'm on the other side of the table. Now I'm an investor, and I've seen people I backed who have surprised me in such positive ways. I've seen other people who've disappointed me, and it's made me reflect on the importance of the founding team. So, you have the best idea, but it has to be tied with a founding team or a founder that is extraordinarily resilient, stubborn, hardworking and certainly intelligent. And most people who fit those characteristics have aspects of them that maybe you don't fully admire.

Can you talk a little bit about messages that you want people to remember from the “Bandwidth” book? 

I wrote that book because I felt compelled to write the book. You have to have a reason to write a book, especially a book of that length, because it had to be thoroughly researched. It was a story, an epic story that started even before the internet was invented. But I wanted it because I knew so many people who were part of this story.

And it was so muddled. Everyone thinks of dot-com, but they didn't think about the infrastructure underneath it. And everything we went through to building industries that didn't exist, to all the mistakes that were made, to all the heroics that were used to overcome those. I wanted to capture that for those who were part of it.

Your book has “deception” in the subtitle. Without naming names, what behavior during the boom do you see that might be repeating now? What should we watch for? 

The Telecom Meltdown led to the biggest stock market crash in history and deception was the underlying cause. Executives went to jail for long periods of time, including my boss's boss Bernie Ebbers. WorldCom even asked me to do some stuff that I knew was wrong. Fortunately, I didn't do it, or else I could end up in jail.

… It was the difference between trying to convince others your company was worth a lot more than it really was and then hoping you could sell it before they figured it out. And then when the crash came, you started finding out there were a lot of really bad games being played. And I think we're going to see a lot of that when we have some adjustments in the market in the not-too-distant future.

Looking back from your vantage point as an investor, as a corporate leader, what should we be teaching students now that perhaps we were not teaching years ago around the entrepreneurial ecosystem and around entrepreneurship?

I think you should be teaching something now that we used to teach before … Capitalism is good.

… The key to continuing to advance the world is using the forces of creation, of innovation, to keep moving things forward. If you're worried about the health of the Earth, which we all should be, and you believe that our consumption of energy is part of what's causing us to be concerned, is the solution that people go back and live a very simple life … Or is the solution technology to create new sorts of energy that are more friendly to the planet? I would say it's the latter.

As these students go off in the real world from University of Illinois, what advice would you have for them as they launch their careers?

First of all, the fact that you guys came here today means you're curious and you're willing to put into the extra effort because you could have easily done something else with your afternoon.

So, the first one is being curious, lean in. The second is a lot of this stuff is more of a team sport. I was slow to learn this lesson. Look for opportunities to build partnerships with others around you, people who are your classmates today. Think long game. There are relationships that you have an opportunity to build today that might be really important in your life journey. And if you don't build those, those are lost opportunities. Get out there.

If you want to be part of these big changes, you've got to be willing to go to where the hot activity is. Take some risks. Join some teams.

“There are relationships that you have an opportunity to build today that might be really important in your life journey. And if you don't build those, those are lost opportunities.”

 — Dan Caruso

One thing not to do for most people is a startup. That's not where you learn the most, the quickest. Where you learn the quickest is a scale-up — a company that's already past the ideation phase. They're starting to build a business. They're starting to get customer traction. They're onto something big. Join them.

… You're going to learn as part of being part of that journey. And you're going to build relationships in an area that you care about. Then you could get together with a few people and say, “O.K., now I get how this works. Do you want to go do a startup together?”

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Illinois Grainger Engineering affiliations
Rashid Bashir, Grainger Distinguished Chair in Engineering and professor in the Department of Bioengineering, is also the Dean of the Illinois Grainger College of Engineering. He is a fellow of the IEEE and the Biomedical Engineering Society, and a member of the National Academy of Medicine and the American Academy of Arts and Sciences. He received the 2018 Pritzker Distinguished Lecture Award from BMES and was a key member of the founding team at the Carle Illinois College of Medicine, the world’s first engineering-based medical school. He also serves as the Vice Chancellor for Chicago Strategic Partnerships.