How modern venture capital started with ARDC and DEC, the role of SBICs, and how VC funds raise, deploy, and return capital.
Modern venture capital traces to 1946 with Georges Doriot's American Research & Development Corporation (ARDC), which financed commercialization of post‑war innovation. ARDC's early success with Digital Equipment Corporation set the tone for the industry.
The 1958 Small Business Investment Act created SBICs, providing leverage and structural support for small‑business financing and seeding venture ecosystems across the U.S.
Closed‑end partnerships typically run 10–12 years. Limited partners commit capital upfront, managers call capital over an investment period, and proceeds flow back through distributions as exits occur.
VC seeks asymmetric, power‑law outcomes uncorrelated to public markets. Risks include high dispersion, illiquidity, and J‑curve effects; prudent pacing and diversification across vintages are key.