TL;DR - Early instances of deploying risk capital and VC-like activity occurred prior to 1900.
Helpfulness - 5
Tags - risk capital, venture capital, LP, Glass-Steagall Act
- What were early instances of risk capital?
- Some consider Queen Isabella of Spain to be the first major deployer of risk capital (VC) when she backed Christopher Colombus.
- The whaling industry (~1840s) can be likened to VC with agents (similar to VCs), expeditions (similar to startups), wealth investors (similar to LPs), ship captains (entrepreneurs), and a high-risk high-reward environment (30% of voyages lost money).
- J.P. Morgan acted as a VC when he financed Thomas Edison’s General Electric Company (1878).
- Banks played a large role in funding startups until Glass-Steagall Act (1933).
Follow up links:
- Glass-Steagall Act, https://www.investopedia.com/articles/03/071603.asp