Risk Latte - The Start of the Venture Era

The Start of the Venture Era

Rahul Bhattacharya
Jan 24, 2006

The first modern venture capital (VC) firm was American Research and Development. It was formed in 1946 as a publicly traded closed-end fund. In the early forties, broadcasting, aerospace and pharmaceutical industries were at the forefront of growth and these industries needed a large infusion of capital. American Research and Development targeted these companies.

The first venture capital limited partnership was started in 1958 and it was called Draper, Gaither and Anderson. In the same year the US Congress created the Small Business Investment Companies (SBICs). SBICs provided both Management as well as capital to many successful companies such as Apple Computer, FedEx and Intel. Citicorp Venture Capital and Clinton Capital are two examples of SBIC.

This was beginning of an era that would ultimately herald the technological age in the world.

(Reference: Handbook of Alternative Assets by Mark J.P. Anson)

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