![]() Since 1974, corporate pension plans haveġ See W. Furthermore, the annual flow of money into venture capital limited partnerships or closed end funds never exceeded a few hundred million dollars during this time period.2Ī third important watershed in the development of the venture capital industry was a change in the "prudent person" standard in the rules governing the pension fund industry in the 1970s. Although imitators soon followed, limited partnerships accounted for a small number of the venture capital vehicles throughout the 1960s and 1970s. Limited partnerships have become the standard tool for investing in venture capital by wealthy and institutional investors. The second development in 1958 was the formation of the first venture capital limited partnership, Draper, Gaither, and Anderson. Today, there are an estimated 300 SBICs in the United States, concentrated in states with high levels of entrepreneurial talent such as California, Massachusetts, New York, and Texas.1 SIBCs have provided financing to successful household names such as Apple Computer, Federal Express, and Intel Corporation. These companies include Citicorp Venture Capital and Clinton Capital. These are government-backed but privately owned investment companies that provide both management assistance and venture financing for start-up companies. SBICs are licensed and regulated by the Small Business Administration. In 1958 two new developments were introduced into the venture capital industry.įirst, Congress created the Small Business Investment Companies (SBICs). ![]() Most were structured as closed-end funds like American Research and Development. Over the next 12 years, a small number of venture capital firms (less than 20) were established. Its investment objective was to finance companies in growth industries, at that time broadcasting, aerospace, and pharmaceuticals. It was formed in 1946 as a publicly traded closed-end fund. The first modern venture capital firm was American Research and Development.
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