Venture Capital
Entrust money raised from other people to a company with no revenue and nothing to pledge. The first organisation to do that was ARDC, founded on 6 June 1946 by Georges Doriot and Karl Compton, president of MIT, among others. Raise from institutions by public offering, and have professionals invest it systematically in young technical companies — what had been the hobby of the very rich became a profession here. The firm's own record shows the nature of this business exactly. In 1957 it put $70,000 into a young company called DEC for seventy per cent of the shares. At the flotation of 1966 that stake was worth about $38.5 million. Over twenty-five years ARDC returned 14.7 per cent a year — 7.4 per cent with DEC taken out. A single deal had roughly doubled the record of the whole fund. Most lose money and a very few great ones carry the rest: the same shape as the whaling of the nineteenth century, in the band next door. Tom Nicholas of Harvard laid the spread of returns from the New Bedford voyages over the spread of venture capital returns from 1981 to 2006 and showed how closely they match. This is not ancestry, though. No people, no capital and no contract forms were handed down across the gap. The same question found the same shape of answer a second time, a century apart — that is how this map writes it. The vessel itself settled around 1958: limited liability, a ten-year term, and a fifth of the gain. In Japan the first was Kyoto Enterprise Development in 1972, which was wound up in 1979; the oldest still standing is JAFCO, from 1973.
The myth, corrected
«Two and twenty» is the direct descendant of the mudaraba, the commenda and the whaler's lay
The structures do resemble each other closely: the side that puts up the money caps what it can lose, and the side that does the work is paid on the outcome. But no scholarly argument connecting these three as one lineage could be found. The industry tells it as a family tree; what can actually be said is that the same question has arrived at the same answer several times, independently. This map draws only a thin line of its own reading there.