Date of this Version
Industrial and Corporate Change
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.
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.
venture capital, entrepreneurship, organizational evolution, business history
Hsu, D. H., & Kenney, M. (2005). Organizing Venture Capital: The Rise and Demise of American Research & Development Corporation, 1946–1973. Industrial and Corporate Change, 14 (4), 579-616. http://dx.doi.org/10.1093/icc/dth064
Date Posted: 27 November 2017
This document has been peer reviewed.