History of Private Equity and Venture Capital by Jake Powers

TL;DR -

Helpfulness - 5

Tags - History of VC, Key players, early days

Questions answered:

  • Who were the key players in the early days of VC?
  • How, why, and when were VC firms created?

Summary:

  • In 1946 the first two venture capital firms American Research and Development Corporation (ARDR) and J.H. Whitney & Company were founded. ARDC is credited with the first major venture capital success story when its 1957 investment of $70,000 in Digital Equipment Corporation (DEC) would be valued at over $355 million after the company's IPO in 1968
  • One of the first steps toward a venture capital industry was the passage of the Small Business Investment Act of 1958 which allowed people to help the financing and management of the small entrepreneurial businesses
  • Throughout the 1970s, a group of private equity firms, focused primarily on venture capital investments, would become the model for later VC firms
  • The public successes of the venture capital industry in the 1970s and early 1980s (e.g., DEC, Apple, Genentech) gave rise to a major proliferation of venture capital investment firms. From just a few dozen firms at the start of the decade, there were over 650 firms by the end of the 1980s, each searching for the next major "home run".

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