VentureSouq and VC’s Growing Role in Sustainability
venturesouq.substack.com
This article was original published in Lucidity Insights. Venture Capital (VC) is a relatively young form of investing, being an asset class largely legitimized in the 1970s. VC is a type of funding provided to startups which often don’t have access to bank loans due to their risky nature; thus, VC provides this riskier capital, for a startups’ high growth potential with above-average returns and partial ownership. Its development can be credited to Georges Doriot, a pioneer in the field and the “father of venture capital”, who formed the first modern VC firm back in 1946: the American Research and Development Corporation (ARDC). Doriot formed ARDC with his colleagues: MIT President, Karl Compton; Massachusetts Investors Trust chairman, Merrill Griswold; and Federal Reserve Bank of Boston president, Ralph Flanders. ARDC’s first investment of US$70,000 was in 1957 when it funded the Digital Equipment Company (DEC) for a 77% stake, which proved to be successful as the company’s value later increased to US$355 million after going public in 1968. Prior to that, wealthy families were the main source of risk capital. In the 1960s and 1970s, venture capital was focused on electronic and technology startups, mostly based in California which became known as Silicon Valley due to the region’s large number of silicon chip manufacturers. In the 1970s and 1980s, VC firms enjoyed successful exits of some of the biggest companies today such as Apple, Electronic Arts (EA), and Microsoft.
VentureSouq and VC’s Growing Role in Sustainability
VentureSouq and VC’s Growing Role in…
VentureSouq and VC’s Growing Role in Sustainability
This article was original published in Lucidity Insights. Venture Capital (VC) is a relatively young form of investing, being an asset class largely legitimized in the 1970s. VC is a type of funding provided to startups which often don’t have access to bank loans due to their risky nature; thus, VC provides this riskier capital, for a startups’ high growth potential with above-average returns and partial ownership. Its development can be credited to Georges Doriot, a pioneer in the field and the “father of venture capital”, who formed the first modern VC firm back in 1946: the American Research and Development Corporation (ARDC). Doriot formed ARDC with his colleagues: MIT President, Karl Compton; Massachusetts Investors Trust chairman, Merrill Griswold; and Federal Reserve Bank of Boston president, Ralph Flanders. ARDC’s first investment of US$70,000 was in 1957 when it funded the Digital Equipment Company (DEC) for a 77% stake, which proved to be successful as the company’s value later increased to US$355 million after going public in 1968. Prior to that, wealthy families were the main source of risk capital. In the 1960s and 1970s, venture capital was focused on electronic and technology startups, mostly based in California which became known as Silicon Valley due to the region’s large number of silicon chip manufacturers. In the 1970s and 1980s, VC firms enjoyed successful exits of some of the biggest companies today such as Apple, Electronic Arts (EA), and Microsoft.