Management Papers

Document Type

Journal Article

Date of this Version

8-2005

Publication Source

Industrial and Corporate Change

Volume

14

Issue

4

Start Page

579

Last Page

616

DOI

10.1093/icc/dth064

Abstract

While venture capital (VC) has become an important element of the twentiethcentury US innovation system, few studies have systematically examined the origins and evolution of this financial institution. We take a step in this direction by analyzing the evolution of the early and influential VC firm, American Research & Development Corporation (ARD), in the period that it was independent from 1946 to 1973. We place the creation and subsequent evolution of ARD within its historical context and show how it was an innovation by Boston-area civic elites. Using new historical data, we examine the evolution of ARD’s practices over time. We argue that ARD’s funding model constrained its functioning as a venture capital firm and contributed to its demise. ARD was a pioneering organization whose business model ultimately failed as a newer organizational model, the limited partnership, was created and had a better fit with the business environment. Nevertheless, ARD has had a lasting imprint on the practice of modern venture capital.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in Industrial and Corporate Change following peer review. The version of record is available online at: http://icc.oxfordjournals.org/content/14/4/579.short.

Keywords

venture capital, entrepreneurship, organizational evolution, business history

Download

Share

COinS
 

Date Posted: 27 November 2017

This document has been peer reviewed.