Sunday's column: Georges Doriot and the Origins of Venture Capital

Today's Globe column focuses on Georges Doriot, the founder of the modern venture capital industry...and the subject of a new book, "Creative Capital", by BusinessWeek editor Spencer Ante.

The opening:

Without him, Digital Equipment Corp. might never have gotten started, and the electronics-testing company Teradyne Inc. might not have survived beyond infancy.

He backed an oil rig-manufacturing company run by George H.W. Bush. The current Secretary of Energy, Samuel Bodman, once worked for his Boston firm. And a half-century ago, he put $50,000 into a company called Ionics Inc. that was trying to find new ways to desalinate seawater; GE bought the company in 2004 for $1.1 billion.

Georges Doriot is the forgotten grandfather of the modern venture capital industry. His Boston firm, American Research and Development, or ARD, helped lay the foundation for the Route 128 technology cluster.

Here's the video:



One correction to the column: Ante notes on his blog that the total amount ARD invested in Digital was more like $400,000; $70,000 was just the initial tranche.

Forthcoming book on George Doriot, the Granddaddy of Venture Capital

It's not gonna be out until next April, but I'm looking forward to the publication of 'Creative Capital: George Doriot and the Birth of Venture Capital.' The author is Spencer Ante from BusinessWeek. (Note: I have no connection to the author or publisher... just mentioning it 'cause I find it interesting.)

Doriot was an influential prof at HBS and the founder of American Research and Development, the first VC firm; their biggest hit was a li'l company called Digital Equipment Corporation.

I'm not aware of another biography that has been written about Doriot, though someone did collect his writings in 2004.

Here's the description of 'Creative Capital,' from the Harvard Business School Press book catalog

...The author traces the pivotal events in Doriot's life, including his experience as a decorated brigadier general during World War II; as a maverick professor at Harvard Business School; and as the architect and founder of the first venture capital firm, American Research and Development.

....Ante gives us a rare look at the man who overturned conventional wisdom by proving that there is big money to be made by investing in small and risky businesses. This vivid portrait of George Doriot reveals the rewards that come from relentlessly pursuing what-if possibilities. ...

From Doriot's obituary in the NY Times:

In his role as a venture capitalist, Mr. Doriot thought of himself as someone who nurtured others' dreams. Comparing his role to that of a father with his children, he refused to give up on a business that was going through hard times. ''A history of profits is much more important in the long run than a profit in any one year,'' he said.