Tier 1 venture capital firms11/7/2023 ![]() Yet they also had high returns if they were successful. Like the startups of today, whaling expeditions had high costs and extraordinary risks (except being lost at sea is a rare danger for the founders of today). Although other industries across history, such as gold exploration and oil wildcatting, have been characterized by long-tail outcomes, no industry gets quite as close as whaling does to matching the organization and distribution of returns associated with the VC sector.” “Nineteenth century whaling can be compared to modern venture capital… Whaling was the archetypical skewed-distribution business, sustained by highly lucrative but low-probability payoff events… The long-tailed distribution of profits held the same allure for funders of whaling voyages as it does for a venture capital industry reliant on extreme returns from a very small subset of investments. In an interesting comparison, Nicholas focuses on the whaling industry. In his book, VC: An American History, Nicholas discusses the history of VC in the United States. If you want to know the origins of modern venture capital, then Harvard professor Tom Nicholas has you covered. VC is still a relatively young industry and by standing on the shoulders of giants, you can give yourself a major advantage. Now before you bemoan how history is a collection of dates, places, and people that no longer matter, you need to realize how paramount VC history actually is.īecause current and future VCs can benefit from our predecessors in the industry. ![]() In this article, we are going to explore the history of venture capital and how it has evolved over the years. Whether you are a fresh out of college and want a job at a hot firm or a founder looking to raise capital for the first time, it seems that everyone wants to be in VC.īut when did all this begin? How far does venture capital go back? Did the ancient Egyptians pitch the pharaohs on a pyramid that would be disruptive and an improvement on the ziggurat? Was Christopher Columbus' discussion with Queen Isabella regarding the financing of his journey of exploration truly a startup pitch? Or is this something that was born recently in terms of the historical scale? ![]() Venture capital is all the rage these days. ![]()
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