Venture Capital Principals

Venture capital as a structured, formalized investment strategy began in 1946 when Georges Doriot and others started American Research and Development Corporation (ARDC), the first publicly owned venture capital (VC) firm. Also in 1946, three wealthy families established professional VC operations (Rockefeller Brothers Inc., J. H. Whitney, and Payson & Trask) in New York City. From 1946 through 1957, ARDC and the three family entities engaged in VC investing, but no other VC firms were founded. From the late 1950s onward, a series of technological, political, financial, and regulatory events fueled growth in the VC industry. The industry really took off in the late 1980s and early 1990s as a result of the tech boom. Since then, there have been a series of booms and busts, with the most recent bust occurring as a result of the Great Recession of the late 2000s. The industry has since been on the upswing, with a slight slowdown due to the coronavirus pandemic in 2020. However, the venture capital industry has been resilient and able to conduct business throughout. There are currently more than 1,000 venture capital firms in the U.S., according to the National Venture Capital Association.