Venture capital in the U.S.

Abstract

The modern venture capital industry came into being in 1946, when MIT president Karl Compton, Harvard Business School professor Georges F. Doriot, and local business leaders from the Boston area founded American Research & Development (ARD).¹ ARD’s goal was to help commercialize technology developed during the Second World War, and what made ARD “modern” was the fact that in addition to simply providing capital to startups, assisting its portfolio firms with management assistance was also part of the plan from the very beginning.

For a compact overview of the history of the U.S. private equity market see Fenn et al. (1995: 7–16). Gaida (2002: 86–174) gives a detailed overview of the history of the private venture capital market in the U.S.