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Creative Capital
Venture capitalists are the handmaidens of innovation. Operating in the background, they provide the fuel needed to get fledgling companies off the ground--and the advice and guidance that helps growing companies survive their adolescence.
In Creative Capital, Spencer Ante tells the compelling story of the enigmatic and quirky man--Georges Doriot--who created the venture capital industry. The author traces the pivotal events in Doriot's life, including his experience as a decorated brigadier general during World War II; as a maverick professor at Harvard Business School; and as the architect and founder of the first venture capital firm, American Research and Development. It artfully chronicles Doriot's business philosophy and his stewardship in startups, such as the important role he played in the formation of Digital Equipment Corporation and many other new companies that later grew to be influential and successful.
An award-winning Business Week journalist, Ante gives us a rare look at a man who overturned conventional wisdom by proving that there is big money to be made by investing in small and risky businesses. This vivid portrait of Georges Doriot reveals the rewards that come from relentlessly pursuing what-if possibilities--and offers valuable lessons for business managers and investors alike.
In Creative Capital, Spencer Ante tells the compelling story of the enigmatic and quirky man--Georges Doriot--who created the venture capital industry. The author traces the pivotal events in Doriot's life, including his experience as a decorated brigadier general during World War II; as a maverick professor at Harvard Business School; and as the architect and founder of the first venture capital firm, American Research and Development. It artfully chronicles Doriot's business philosophy and his stewardship in startups, such as the important role he played in the formation of Digital Equipment Corporation and many other new companies that later grew to be influential and successful.
An award-winning Business Week journalist, Ante gives us a rare look at a man who overturned conventional wisdom by proving that there is big money to be made by investing in small and risky businesses. This vivid portrait of Georges Doriot reveals the rewards that come from relentlessly pursuing what-if possibilities--and offers valuable lessons for business managers and investors alike.
299 pages, Hardcover
First published January 1, 2008
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September 9, 2020
Anyone wanting to know about Venture Capital industry in America. I would highly recommend reading George Doriot.
George Doriot was a man of ideas, who put ideas into fruition. He came as a French immigrant, worked in banking sector, became an academic, seasoned with some military background, finally became a part of American Venture capitalism.
Deus Vult
Gottfried
George Doriot was a man of ideas, who put ideas into fruition. He came as a French immigrant, worked in banking sector, became an academic, seasoned with some military background, finally became a part of American Venture capitalism.
Deus Vult
Gottfried
June 14, 2013
Not many people ever heard of Georges Doriot. I knew his name because I know a little about VC. But I did not know much about him. Now that I read Creative Capital by Spencer Ante, I know much more. As usual, when I comment books, I mostly do some copy-pastes. Here they are:
In 1921, Doriot came to America on a steamship. Even though he had no friends or family in the United States, never graduated from college, and dropped out of graduate school, the Frenchman became, arguably, the most influential and popular professor at Harvard University’s Graduate School of Business. Over three generations, Doriot taught thousands of students [Page xiv].
He was early to recognize the importance of globalization and creativity in the business world. “A lot of the things that were attributed to Peter Drucker [link blog] were Doriot’s ideas” says Charles P. Waite [Page xv].
He believed in building companies for the long haul, not flipping them for a quick profit. Returns were the by-product of hard labor, not a goal. Doriot often worked with a company for a decade or more before realizing any return. That is why he often referred to his companies as his “children”. “When you have a child, you don’t ask what return you can expect” Doriot was quoted in a 1967 Fortune story “Of course, you have hopes – you hope the child will become President of the United States. But that is not very probable. I want them to do outstandingly well in their field. And if they do, the rewards will come. But if a man is good and loyal and does not achieve a so-called good rate of return, I will stay with him. Some people don’t become geniuses until after they are 24, you know. If I were a speculator, the question, of return would apply. But I don’t consider a speculator – in my definition of the word – constructive. I am building men and companies.” [Page xvii]
“A creative man merely has ideas; a resourceful man makes them practical.” [Page xviii]
[He] ushered a new era of corporate culture. At Digital, the engineer was king. Hierarchy was out. Controlled chaos was in. Like Jack Kerouac and the Beat Generation, Digital was a petri dish in which the counterculture was spawned in the late 1950s. “He was definitely part of a social revolution that loosened things up.”
For 20 years Doriot was a professor and a business advisor. “How did a man with hardly any experience running a business come to be such a world-class businessman? The answer is that during those years, dozens of companies hired the professor to help guide them through the worst disaster that ever hit the American economy. In that dark decade, Doriot gained a lifetime experience as an officer, director and consultant” [page 64].
American Research and Development Corporation (ARD)
The idea of an entity helping companies by making risky investments was born before World War II but could be implemented only in 1946. On June 6, 1946, the American Research and Development Corporation (ARD) was incorporated under Massachusetts law. It believed in “innovation, risk-taking and an unwavering belief in human potential”. They also realized that organizations with fiduciary resources and the seasoned operators running them were not daredevils skilled in the art of invention and that, conversely, inventors were struggling creative types with no money. ARD sought to bring together these two independent yet largely separate communities.
Typically, ARD preferred to take a hands-off approach. They were there to coach, guide and inspire. Running the business was the job of the entrepreneur. But quite often, circumstances called for more drastic action. [Page 121]
“Never go in venture capital if you want a peaceful life”. [Page 126] In 1953, Doriot was gloomy about the state of venture capital. “Venture capital is not fashionable anymore.” Waves of technologies seemed to come out of nowhere and crash onshore every twenty or thirty years. The trick of a venture capitalist was to catch the wave several years before it crested ad to bail out before it crashed. [Looks like speculation, or doesn’t it?] It is interesting to see how the great interest that existed seven or eight years ago in venture capital has disappeared and how the daring and courage which were prevalent at that time have now waned” wrote Doriot. [page 138]
A star is born – 1957
“In the early 1950s, the postwar euphoria of the previous decade that had infused Americans with a sense of infinite possibilities morphed into a Cold War miasma of fear and paranoia. Yet underneath the surface of fear, a subculture of experimentation and rebellion flourished. In the early – to mid-190s, Allen Ginsberg, jack Kerouac, and William Burroughs developed a radical new form of literature that emphasized “stream of consciousness” writing. Modern abstract painting by Jackson Pollock, Willem de Kooning, and Mark Rothko overthrew European conventions of beauty and form. And in laboratories and universities across the northeastern seaboard, a bunch of scientists and engineers tinkered away on strange but powerful new electronics and computer devices that promised to completely change the way people communicated and conducted business. “ [Page 147]
In the spring 1957 Ken Olsen then at MIT would team up with his buddy Harlan Anderson. They had an idea and a plan. They needed some money. They approached General Dynamics, who “turned them down flat because we didn’t have any business experience.” Then they contacted ARD. ARD had the perfect formula: two grade A men paired with an outstanding idea. ARD offered $70,000 for a 70 percent stake. Ten percent was reserved for a seasoned manager (who would never be found or hired) and the remaining 20% to the 2 founders (12% to Olsen and 8% to Anderson). Because computers were not fashionable, the company project name was changed from Digital Computers to Digital Equipment Corporation (DEC). [Pages 148-150]
The birth of a new industry
1957 was a critical year. America was shocked by the Sputnik. Public money flowed both to R&D with the creation of ARPA (later DARPA) and to venture capital through the new SBIC program. “Many of today’s most successful venture capitalists rightly point out that the SBIC program never created a company of considerable or lasting success. But if the SBIC program did little to advance the art and practice of successful venture investing, it did help propel the venture industry by attracting talented young men who later became pioneers of the field.
In 1957, Doriot also worked at the creation of INSEAD in Paris which was opened in September 1959. Doriot would have 3 careers in his life, a professor at Harvard business school (including helping in the creation of INSEAD), a consultant and even a administrator for the Army, the reason why he was a general and finally a VC with not only ARD but also at the origin of TED (UK), CED (Canada) and EED (Europe).
The success of DEC would make ARD highly successful but would also contribute to its end… As an investment company, ARD was highly regulated; compensation of its employees would become a long battle with SEC and IRS. Only 4 ARD employees would get DEC shares (worth $20M for each individual) and the allocation looked arbitrary to many. “Pressure was growing on ARD to divulge its growing mess of regulatory problems, and to take Digital public. But Doriot did not think Digital was ready to deal with the unforgiving spotlight of public ownership.” [Page 186]
Doriot did not prepare his succession, incentives were low for employees. Some left. Elfers was first and founded Greylock, Waite would follow him. “There was one more reason Elfers left. He realized along with an increasing number of investors in new companies that venture capital and the stock markets mixed as well as oil and water. For Elfers, the solutions to many of ARD’s problems was to take advantage of a new organizational form: the limited partnership (LP). In 1959, the first LP was organized in Palo Alto: Draper, Gaither & Anderson. Then in 1961, Arthur Rock, a former student of Doriot formed Davis & Rock. There were distinct advantages. General partners who ran the firm received not only a management fee, they also received a share of the capital gains. A limited partnership would avoid the glare of public disclosure.” [Page 190]
Still the DEC IPO was a success. “The Digital IPO amounted to a financial revolution. It was really mind-blowing that you could take such a small amount of seed capital and get ownership of a company that was worth more than IBM in a fairly short period of time.” [page 197]
The emergence of Silicon Valley
“Today many financiers and entrepreneurs assume the west coast always dominated the VC business. They simply do not realize the industry was pioneered by ARD and a few other northeastern firms in the three decades following World War II. So why did Silicon Valley take over leadership?” [page 227] Spencer Ante explains that with MIT, Harvard, in Boston and New York as the financial capital, the East Coast had a huge lead; but a hospitable climate, ethnic diversity and the vision of Terman at Stanford were critical for the West. “Terman was disturbed to find most of his top students fleeing to the east coast. In 1934, two of his best students, Dave Packard and William Hewlett, followed the same path. Terman wooed them back.” [page 229] Then following Fairchild, semiconductor makers started popping up all over northern California. “All It needed was a steady supply of venture capital.” It’s ironic to read that Tom Perkins declined joining ARD. He wanted to launch his own firm. With Sequoia, Kleiner Perkins would become one of the top 2 VCs in Silicon Valley. The rest is history… ARD was merged with Textron for $400M in 1972. It had made more than $200M in DEC from an initial $70k seed investment.
“In 1978, there were 23 venture funds managing $500 million. By 1983, there were 230 firms overseeing $11 billion. “ [page 250] No doubt, the East Coast missed some of the features that the West would develop with an open culture and the right incentives, in addition to what Doriot pioneered on the East Coast… He dies on June 2, 1987. He was 87 years old.
In 1921, Doriot came to America on a steamship. Even though he had no friends or family in the United States, never graduated from college, and dropped out of graduate school, the Frenchman became, arguably, the most influential and popular professor at Harvard University’s Graduate School of Business. Over three generations, Doriot taught thousands of students [Page xiv].
He was early to recognize the importance of globalization and creativity in the business world. “A lot of the things that were attributed to Peter Drucker [link blog] were Doriot’s ideas” says Charles P. Waite [Page xv].
He believed in building companies for the long haul, not flipping them for a quick profit. Returns were the by-product of hard labor, not a goal. Doriot often worked with a company for a decade or more before realizing any return. That is why he often referred to his companies as his “children”. “When you have a child, you don’t ask what return you can expect” Doriot was quoted in a 1967 Fortune story “Of course, you have hopes – you hope the child will become President of the United States. But that is not very probable. I want them to do outstandingly well in their field. And if they do, the rewards will come. But if a man is good and loyal and does not achieve a so-called good rate of return, I will stay with him. Some people don’t become geniuses until after they are 24, you know. If I were a speculator, the question, of return would apply. But I don’t consider a speculator – in my definition of the word – constructive. I am building men and companies.” [Page xvii]
“A creative man merely has ideas; a resourceful man makes them practical.” [Page xviii]
[He] ushered a new era of corporate culture. At Digital, the engineer was king. Hierarchy was out. Controlled chaos was in. Like Jack Kerouac and the Beat Generation, Digital was a petri dish in which the counterculture was spawned in the late 1950s. “He was definitely part of a social revolution that loosened things up.”
For 20 years Doriot was a professor and a business advisor. “How did a man with hardly any experience running a business come to be such a world-class businessman? The answer is that during those years, dozens of companies hired the professor to help guide them through the worst disaster that ever hit the American economy. In that dark decade, Doriot gained a lifetime experience as an officer, director and consultant” [page 64].
American Research and Development Corporation (ARD)
The idea of an entity helping companies by making risky investments was born before World War II but could be implemented only in 1946. On June 6, 1946, the American Research and Development Corporation (ARD) was incorporated under Massachusetts law. It believed in “innovation, risk-taking and an unwavering belief in human potential”. They also realized that organizations with fiduciary resources and the seasoned operators running them were not daredevils skilled in the art of invention and that, conversely, inventors were struggling creative types with no money. ARD sought to bring together these two independent yet largely separate communities.
Typically, ARD preferred to take a hands-off approach. They were there to coach, guide and inspire. Running the business was the job of the entrepreneur. But quite often, circumstances called for more drastic action. [Page 121]
“Never go in venture capital if you want a peaceful life”. [Page 126] In 1953, Doriot was gloomy about the state of venture capital. “Venture capital is not fashionable anymore.” Waves of technologies seemed to come out of nowhere and crash onshore every twenty or thirty years. The trick of a venture capitalist was to catch the wave several years before it crested ad to bail out before it crashed. [Looks like speculation, or doesn’t it?] It is interesting to see how the great interest that existed seven or eight years ago in venture capital has disappeared and how the daring and courage which were prevalent at that time have now waned” wrote Doriot. [page 138]
A star is born – 1957
“In the early 1950s, the postwar euphoria of the previous decade that had infused Americans with a sense of infinite possibilities morphed into a Cold War miasma of fear and paranoia. Yet underneath the surface of fear, a subculture of experimentation and rebellion flourished. In the early – to mid-190s, Allen Ginsberg, jack Kerouac, and William Burroughs developed a radical new form of literature that emphasized “stream of consciousness” writing. Modern abstract painting by Jackson Pollock, Willem de Kooning, and Mark Rothko overthrew European conventions of beauty and form. And in laboratories and universities across the northeastern seaboard, a bunch of scientists and engineers tinkered away on strange but powerful new electronics and computer devices that promised to completely change the way people communicated and conducted business. “ [Page 147]
In the spring 1957 Ken Olsen then at MIT would team up with his buddy Harlan Anderson. They had an idea and a plan. They needed some money. They approached General Dynamics, who “turned them down flat because we didn’t have any business experience.” Then they contacted ARD. ARD had the perfect formula: two grade A men paired with an outstanding idea. ARD offered $70,000 for a 70 percent stake. Ten percent was reserved for a seasoned manager (who would never be found or hired) and the remaining 20% to the 2 founders (12% to Olsen and 8% to Anderson). Because computers were not fashionable, the company project name was changed from Digital Computers to Digital Equipment Corporation (DEC). [Pages 148-150]
The birth of a new industry
1957 was a critical year. America was shocked by the Sputnik. Public money flowed both to R&D with the creation of ARPA (later DARPA) and to venture capital through the new SBIC program. “Many of today’s most successful venture capitalists rightly point out that the SBIC program never created a company of considerable or lasting success. But if the SBIC program did little to advance the art and practice of successful venture investing, it did help propel the venture industry by attracting talented young men who later became pioneers of the field.
In 1957, Doriot also worked at the creation of INSEAD in Paris which was opened in September 1959. Doriot would have 3 careers in his life, a professor at Harvard business school (including helping in the creation of INSEAD), a consultant and even a administrator for the Army, the reason why he was a general and finally a VC with not only ARD but also at the origin of TED (UK), CED (Canada) and EED (Europe).
The success of DEC would make ARD highly successful but would also contribute to its end… As an investment company, ARD was highly regulated; compensation of its employees would become a long battle with SEC and IRS. Only 4 ARD employees would get DEC shares (worth $20M for each individual) and the allocation looked arbitrary to many. “Pressure was growing on ARD to divulge its growing mess of regulatory problems, and to take Digital public. But Doriot did not think Digital was ready to deal with the unforgiving spotlight of public ownership.” [Page 186]
Doriot did not prepare his succession, incentives were low for employees. Some left. Elfers was first and founded Greylock, Waite would follow him. “There was one more reason Elfers left. He realized along with an increasing number of investors in new companies that venture capital and the stock markets mixed as well as oil and water. For Elfers, the solutions to many of ARD’s problems was to take advantage of a new organizational form: the limited partnership (LP). In 1959, the first LP was organized in Palo Alto: Draper, Gaither & Anderson. Then in 1961, Arthur Rock, a former student of Doriot formed Davis & Rock. There were distinct advantages. General partners who ran the firm received not only a management fee, they also received a share of the capital gains. A limited partnership would avoid the glare of public disclosure.” [Page 190]
Still the DEC IPO was a success. “The Digital IPO amounted to a financial revolution. It was really mind-blowing that you could take such a small amount of seed capital and get ownership of a company that was worth more than IBM in a fairly short period of time.” [page 197]
The emergence of Silicon Valley
“Today many financiers and entrepreneurs assume the west coast always dominated the VC business. They simply do not realize the industry was pioneered by ARD and a few other northeastern firms in the three decades following World War II. So why did Silicon Valley take over leadership?” [page 227] Spencer Ante explains that with MIT, Harvard, in Boston and New York as the financial capital, the East Coast had a huge lead; but a hospitable climate, ethnic diversity and the vision of Terman at Stanford were critical for the West. “Terman was disturbed to find most of his top students fleeing to the east coast. In 1934, two of his best students, Dave Packard and William Hewlett, followed the same path. Terman wooed them back.” [page 229] Then following Fairchild, semiconductor makers started popping up all over northern California. “All It needed was a steady supply of venture capital.” It’s ironic to read that Tom Perkins declined joining ARD. He wanted to launch his own firm. With Sequoia, Kleiner Perkins would become one of the top 2 VCs in Silicon Valley. The rest is history… ARD was merged with Textron for $400M in 1972. It had made more than $200M in DEC from an initial $70k seed investment.
“In 1978, there were 23 venture funds managing $500 million. By 1983, there were 230 firms overseeing $11 billion. “ [page 250] No doubt, the East Coast missed some of the features that the West would develop with an open culture and the right incentives, in addition to what Doriot pioneered on the East Coast… He dies on June 2, 1987. He was 87 years old.
September 20, 2020
Fantastic story of a great American. Call him the father of venture capital. He was a US general during world war 2, Harvard professor and founder of one of the first investment funds. The author shared some fantastic stories of the life of a great man. He also explains the many life and business recommendations. A must read for entrepreneurs, executives and business students.
August 9, 2020
Georges Doriot, what a life well lived.
September 4, 2016
This is my first review on good reads - I'm going for more of a stream of consciousness. Forgive the ramble.
The story of George Doriot offers a rare glimpse into the foundational tenants of VC, many of which we take for granted as modern practitioners. It covers the trial and error of Doriot and his loyal followers as they figure out investment selection, portfolio theory, fund structure, compensation and deal with regulatory hurdles. In making mistakes and putting a tremendous amount of thought into rectifying for future VC practitioners, Doriot secure his place as the patriarch of the modern industry.
I especially found some of his investment guidance helpful:
On diversification: "When a man has a stable of horses and one wins the Grand Prix, do people say 'what a good stable this man has?' Or do they say 'you should get of your winner and develop the others."
Ok valuation: "in the early year figures are meaningless to anyone not very close to the company. It is easier to pass judgment on a 24-year old man than a 3 or 4 year old."
On timing: "Innovation was not like a river, flowing constantly over time. It was more like a heavy surf with waves of technology seeming to come out of nowhere and crashing onshore every twenty or thirty years. The trick for a VC was to catch the wave several years before it crested and to bail out before it crashed."
I also loved the cast of characters: Bill Elfers who founded Greylock when he left ARD; George HW in whose Zapata Energy ARD invested; and Digital Equipment Corp.'s Ken Olson.
A solid base off which to learn more about VC and how it continues to change.
The story of George Doriot offers a rare glimpse into the foundational tenants of VC, many of which we take for granted as modern practitioners. It covers the trial and error of Doriot and his loyal followers as they figure out investment selection, portfolio theory, fund structure, compensation and deal with regulatory hurdles. In making mistakes and putting a tremendous amount of thought into rectifying for future VC practitioners, Doriot secure his place as the patriarch of the modern industry.
I especially found some of his investment guidance helpful:
On diversification: "When a man has a stable of horses and one wins the Grand Prix, do people say 'what a good stable this man has?' Or do they say 'you should get of your winner and develop the others."
Ok valuation: "in the early year figures are meaningless to anyone not very close to the company. It is easier to pass judgment on a 24-year old man than a 3 or 4 year old."
On timing: "Innovation was not like a river, flowing constantly over time. It was more like a heavy surf with waves of technology seeming to come out of nowhere and crashing onshore every twenty or thirty years. The trick for a VC was to catch the wave several years before it crested and to bail out before it crashed."
I also loved the cast of characters: Bill Elfers who founded Greylock when he left ARD; George HW in whose Zapata Energy ARD invested; and Digital Equipment Corp.'s Ken Olson.
A solid base off which to learn more about VC and how it continues to change.
June 7, 2008
So far I'm really liking this book. Only even think about reading it if you're into venture capital or entrepreneurship, but if you are it's a pretty interesting take on one of the fathers of vc and really of high-risk, technology-based investing in general. Venture capital today is a very different beast than when Georges was creating it and this definitely makes you wonder if it wasn't better off the way it used to be...very hands-on and entrepreneur-driven.
May 16, 2019
A fascinating read on the man credited with starting the modern venture capital businesss. Georges Doriot might not have been the first to even use the term venture capital, but this French emigre turned Harvard Business School prof was instrumental in formalizing the concept.
On the eve of WWII Doriot and a number of New England business interests came up with an idea for pooling capital together with the plan of seeding promising business ventures at their earliest stages. The tax laws and economic environment of late 1930s New Deal America had made it almost impossible to fund new, emerging and speculative business ventures. Before the project would launch WWII would see Doriot and so many others who were onboard swept up into serving roles in the war effort. Doriot would rise to the rank of general for his efforts driving logistical and equipment innovations for various arms of the military while utilizing the business acumen he had acquired in life and taught at Harvard.
After the war Doriot returned to the venture capital idea and lanched the American Research and Development Corporation (ARDC or ARD). There were struggles in its early years and many of the businesses it funded were not the high tech type things we associate with VCs now. There was a tuna processing firm, base industrial concerns and investments in the oil patch. Even as ARD found success as it hit its stride in investing it would run afoul of SEC and tax laws at the time which did not support running such a business in a publicly traded company. ARD would have its greatest success as both the emerging computer industry of the 1950s caught a tail wind from the US govt's new found zeal for supporting technology R&D after Sputnik. ARD's greatest hit was its initial backing of DEC. The numerous tech firms ARD financed would be a vital part of the Route 128 high tech corridor around Boston that was the original Silicon Valley. By the 1970s, even with a stellar run of successes, ARD could ot overcome its structurual limitations or find a successor for Doriot and had to be sold to Textron.
However in the 20 years of its existence, coupled to Doriots 30-40 years as a noted HBS professor a legion of businessmen and woman would diffuse across the land. This new generation would take the lessons from Doriot and by making VC firms set up as LP and LLCs they could avoid the structural limitations that had held back ARD. The most famous of these ARD descendants would start making their mark on the West Coast in the 1960s,70s and 80s'
On the eve of WWII Doriot and a number of New England business interests came up with an idea for pooling capital together with the plan of seeding promising business ventures at their earliest stages. The tax laws and economic environment of late 1930s New Deal America had made it almost impossible to fund new, emerging and speculative business ventures. Before the project would launch WWII would see Doriot and so many others who were onboard swept up into serving roles in the war effort. Doriot would rise to the rank of general for his efforts driving logistical and equipment innovations for various arms of the military while utilizing the business acumen he had acquired in life and taught at Harvard.
After the war Doriot returned to the venture capital idea and lanched the American Research and Development Corporation (ARDC or ARD). There were struggles in its early years and many of the businesses it funded were not the high tech type things we associate with VCs now. There was a tuna processing firm, base industrial concerns and investments in the oil patch. Even as ARD found success as it hit its stride in investing it would run afoul of SEC and tax laws at the time which did not support running such a business in a publicly traded company. ARD would have its greatest success as both the emerging computer industry of the 1950s caught a tail wind from the US govt's new found zeal for supporting technology R&D after Sputnik. ARD's greatest hit was its initial backing of DEC. The numerous tech firms ARD financed would be a vital part of the Route 128 high tech corridor around Boston that was the original Silicon Valley. By the 1970s, even with a stellar run of successes, ARD could ot overcome its structurual limitations or find a successor for Doriot and had to be sold to Textron.
However in the 20 years of its existence, coupled to Doriots 30-40 years as a noted HBS professor a legion of businessmen and woman would diffuse across the land. This new generation would take the lessons from Doriot and by making VC firms set up as LP and LLCs they could avoid the structural limitations that had held back ARD. The most famous of these ARD descendants would start making their mark on the West Coast in the 1960s,70s and 80s'
June 15, 2023
It’s a good story, telling the notable journey of Doriot from France to becoming a b school student by accident, a US citizen and a military man, while shining a light on a little-explored period of Boston’s rise, from academic to venture, and how he was able to cultivate links with Europe not least by starting INSEAD.
However I didn’t care much for the breathless characterisation of Doriot, focusing on some rather mundane details and unconvincing quotes, which didn’t give me enough to form a sufficiently good impression of what he was like. This gets worse with a later chapter summarising the move of venture to Silicon Valley which makes the ARD story seem unimpressive and almost incidental by comparison, which is a pity given how much time is spent recounting the various financials of ARD over the years.
I would quite obviously have preferred more on the INSEAD part, or a more engaging description of what ARD actually enabled within the economic context of its time, rather than the overly flattering prose which sometimes sounded almost patronising.
Good quote:
Doriot loathed the word "Administration" in his school's name. "The word 'administration' to me indicates something static," snarled Doriot. "You administer, push buttons. The word I very much like better is the word
'operation.' Operation to me means movement."
However I didn’t care much for the breathless characterisation of Doriot, focusing on some rather mundane details and unconvincing quotes, which didn’t give me enough to form a sufficiently good impression of what he was like. This gets worse with a later chapter summarising the move of venture to Silicon Valley which makes the ARD story seem unimpressive and almost incidental by comparison, which is a pity given how much time is spent recounting the various financials of ARD over the years.
I would quite obviously have preferred more on the INSEAD part, or a more engaging description of what ARD actually enabled within the economic context of its time, rather than the overly flattering prose which sometimes sounded almost patronising.
Good quote:
Doriot loathed the word "Administration" in his school's name. "The word 'administration' to me indicates something static," snarled Doriot. "You administer, push buttons. The word I very much like better is the word
'operation.' Operation to me means movement."
April 22, 2023
This is an important book for those who want to understand the origins of the venture capital industry. Georges Doriot was a venture capitalist in the most traditional sense in that he did much more than investment in companies, he built them. This is an art form that is much rarer these days as venture capital firm’s now have much more money than they can deploy effectively. Those who wish to venture into the world of venture capital would be wise to read this book first. Capital is a commodity in the United States, and if the firm that you plan to invest in is simply a provider of capital, you should pass.
March 1, 2020
This is an excellent book on the real history of venture capital and the importance of the U.S. defense industry in helping to establish it. It quite amusing to see how today you find Silicon Valley "advising" the DoD now though it was DoD policies that actually not only established it out of thin air (well, out of fruit orchards) but it also helped establish the modern day venture capital industry.
August 17, 2018
Interesting chronicle of the start of an industry
Making this story interesting to read was well executed by the author. I do not suspect this would be broadly appealing because of the “niche”nature of the venture capital industry.
Making this story interesting to read was well executed by the author. I do not suspect this would be broadly appealing because of the “niche”nature of the venture capital industry.
April 13, 2020
A storybook success story of a brilliant man as a general, professor, and venture capitalist that is filled with practical and inspiring lessons in business and life.
October 5, 2020
An inspiring story of a successful academic, general & business man.
September 28, 2018
This is a tour through 20th century trans-atlantic innovation as spurred by the first wave of globalization and then made urgent by the great shocks of war and depression that were Doriot's training ground. He cuts an inspiring figure of quality leadership worth emulating.
July 25, 2008
I found this book to be a beautifully written (and long overdue) biography on a man who was almost single-handedly responsible for what became corporate venture capital.
A Frenchman by birth, Georges Doriot was a latter-day Lafayette: his contributions to the Military Planning Division of the Army's Quatermaster General's Office during World War II are practically incalculable. Under his leadership, the Division, which was responsible for all of the material aspects of the American soldier, totally revamped the uniform, foodstuffs, and accessories that permitted the soldier to peform his duty in relative comfort and efficiency.
At Harvard Business School, where Doriot was a professor in the period up to and following World War II, Doriot led a class he simply called "Manufacturing", which served as his blueprint for capitalizing new businesses. Following the war, he created "American Research and Development Corporation", which capitalized such successful firms as Digital Equipment Corporation, Teradyne, Ionics, and Rolm. The firm concentrated in new technologies, and through its own form of patient and thorough analysis of a company's potential, made financial investments -- the funds for which were initially supplied fiduciary houses, including insurance firms.
Doriot was a patient, but firm and resolute leader, and the success of his business - not to mention that of the company's vast group of alumni - is a testament to his extraordinary talents in this field.
Spencer Ante should be commended for a book that reveals not only Doriot's business acumen, but his humanity and generosity. I very much enjoyed it.
A Frenchman by birth, Georges Doriot was a latter-day Lafayette: his contributions to the Military Planning Division of the Army's Quatermaster General's Office during World War II are practically incalculable. Under his leadership, the Division, which was responsible for all of the material aspects of the American soldier, totally revamped the uniform, foodstuffs, and accessories that permitted the soldier to peform his duty in relative comfort and efficiency.
At Harvard Business School, where Doriot was a professor in the period up to and following World War II, Doriot led a class he simply called "Manufacturing", which served as his blueprint for capitalizing new businesses. Following the war, he created "American Research and Development Corporation", which capitalized such successful firms as Digital Equipment Corporation, Teradyne, Ionics, and Rolm. The firm concentrated in new technologies, and through its own form of patient and thorough analysis of a company's potential, made financial investments -- the funds for which were initially supplied fiduciary houses, including insurance firms.
Doriot was a patient, but firm and resolute leader, and the success of his business - not to mention that of the company's vast group of alumni - is a testament to his extraordinary talents in this field.
Spencer Ante should be commended for a book that reveals not only Doriot's business acumen, but his humanity and generosity. I very much enjoyed it.
February 6, 2009
A well-researched biography about a singular figure of American business. Creative Capital presents an admiring, but very balanced portrait of Georges Doriot. The reader has the opportunity to learn from both the positive and negative aspects of his example.
Many of the challenges confronted by Doriot during the nascent stages of the venture capital industry are again relevant today including succession and regulatory oversight. But most importantly, it provides the example of a man who dedicated himself to his work because of his love for the creative capacity of people, not for the compensation.
Well worth reading for anyone who is interested in the venture capital industry.
Many of the challenges confronted by Doriot during the nascent stages of the venture capital industry are again relevant today including succession and regulatory oversight. But most importantly, it provides the example of a man who dedicated himself to his work because of his love for the creative capacity of people, not for the compensation.
Well worth reading for anyone who is interested in the venture capital industry.
January 16, 2016
Before I had read this book, if someone were to ask me when was the first venture capital firm formed, I would have probably guessed at the turn of the 20th century or maybe even before that. I would have guessed wrong. Up until after World War II, financiers around the world were not risk takers and the idea of providing seed capital to entrepreneurs was basically non-existent at least in a structured sense. In 1946, Georges Doriot launched the first structured venture capital firm called American Research and Development Corporation (ARD) which was also publicly traded.
November 26, 2012
Good book. Im writing this several years later and I am having a tough time remembering anything of substance, although I am remembering a lot of the story. So it fits to say its a good book, but i never thought it was great. You will see a lot of the industrial machine in action during World War 2. Youll learn that Europe took its time at establishing graduate schools. Georges helped in the development of the very first one in Paris. Its an easy read, and its ok.
May 31, 2008
Provides insight into the early days of the birth of venture capital and its greatest champion, Georges Doriot. A very well done book on a subject that should be better documented. A must read for all entrepreneurs.
February 8, 2017
Fantastic book and look at Georges Doriot's life. His name is relatively unknown, but he pioneered management courses at HBS, created Europe's first business school and VC firm, and created America's first VC firm.
June 1, 2010
this is certainly the best business biography i have read. A must read for anyone who wants to start his/her own business !!
September 16, 2012
Very thorough and insightful narrative of venture capital through the life of Georges Doriot. Also, the later chapter form the basis of the documentary "Something Ventured".
January 17, 2014
A mediocre idea in the hands of a great man is worth more than a great idea in the hands of a mediocre man.
September 8, 2008
A story of the life and times of the father of modern day venture capitalism.
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