The origins of high-tech venture investing in America by Tom Nicholas

TL;DR - Current American VC exceptionalism should be understood in the context of a long history of “long-tail” investing, which became institutionalized into modern VC with the emergence of the venture firm ARD.

Helpfulness - 5

Tags - risk capital, vc history, notable investors

Questions addressed:

  • How, when, and why did VC emerge as an industry in the United States?
  • What role did the American Research and Development Corporation play?

Summary:

  • The United States has developed a unique environment for high-tech investment finance.
  • The origins of VC are not in Silicon Valley but on the East Coast, where the American Research and Development Corporation was created post-WWII.
  • “Long-tail” high-tech investing has since been institutionalized in a globally unique way.
  • The US has a long history of “long-tail” investing, but ARD’s successful investment in a computer startup in the 1950s was the catalyst for more institutionalized VC.

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