American Research and Development Corporation (ARDC) was a

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

and

private equity firm A private equity firm or private equity company (often described as a financial sponsor) is an investment management company that provides financial backing and makes investments in the private equity of a Startup company, startup or of an existin ...

founded in 1946 by

Georges Doriot Georges Frédéric Doriot (September 24, 1899 – June 2, 1987) was a French-American known for his prolific careers in military, academics, business and education. An émigré from France, Doriot became a professor of Industrial Management at H ...

Ralph Flanders Ralph Edward Flanders (September 28, 1880 – February 19, 1970) was an American mechanical engineer, industrialist and politician who served as a Republican Party (United States), Republican United States Senate, U.S. Senator from the U.S. state, ...

, Merrill Griswold, and

Karl Compton Karl Taylor Compton (September 14, 1887 – June 22, 1954) was an American physicist and president of the Massachusetts Institute of Technology (MIT) from 1930 to 1948. Compton built much of MIT's modern research enterprise, including systems for ...

ARDC is credited with the first major venture capital success story when its 1957 investment of $70,000 in equity ("70% of the company") and approximately $2 million in loans in

Digital Equipment Corporation Digital Equipment Corporation (DEC ), using the trademark Digital, was a major American company in the computer industry from the 1960s to the 1990s. The company was co-founded by Ken Olsen and Harlan Anderson in 1957. Olsen was president until ...

(DEC) became valued at many times the amount invested after the company's success after its initial public offering in 1966. ARDC continued investing until 1971 with the retirement of Doriot. In 1972, Doriot merged ARDC with

Textron Textron Inc. is an American industrial Conglomerate (company), conglomerate based in Providence, Rhode Island. Textron's subsidiaries include Arctic Cat, Bell Textron, Kautex, Textron Aviation (which itself includes the Beechcraft and Cessna b ...

after having invested in over 150 companies.

Legacy

The firm was founded to encourage private sector investments in businesses run by soldiers who were returning from World War II. ARDC's significance was primarily that it was the first institutional private equity investment firm that accepted money from sources other than wealthy families as had J.H. Whitney & Company and Rockefeller Brothers although it had several investment successes as well. Former employees of ARDC have gone on to found several prominent venture capital firms including

Greylock Partners Greylock Partners is one of the oldest venture capital firms, founded in 1965, with committed capital of over $3.5 billion under management. The firm focuses on early-stage companies in consumer and enterprise software. History Greylock wa ...

(founded in 1965 by Charlie Waite and Bill Elfers) and Morgan, Holland Ventures, the predecessor of Flagship Ventures (founded in 1982 by James Morgan).Kirsner, Scott. "Venture capital's grandfather." The Boston Globe, April 6, 2008.

References

{{Venture capital firms Companies based in Boston Financial services companies established in 1946 Venture capital firms of the United States 1946 establishments in Massachusetts Financial services companies disestablished in 1972 1972 disestablishments in Massachusetts

Legacy

See also

References