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Georges F. Doriot (September 1899 – June 1987) was one of the first American venture capitalists. In 1946, he founded American Research and Development Corporation
American Research and Development Corporation

American Research and Development Corporation was a venture capital and private equity firm founded in 1946 by Georges Doriot, the "father of venture capitalism" , with Ralph Flanders and Karl Compton ....
, the first publicly owned venture capital firm.

in Paris
Paris

Paris is the Capital of France and the country's largest city. It is situated on the river Seine, in northern France, at the heart of the ?le-de-France Regions of France ....
, France
France

France , officially the French Republic , is a country whose Metropolitan France is located in Western Europe and that also comprises various Overseas departments and territories of France....
 in 1899, Doriot enlisted in the French army in 1920. He immigrated to America to earn an MBA
Master of Business Administration

The Master of Business Administration is a master's degree in business administration, which attracts people from a wide range of academic disciplines....
 and stayed on, becoming a professor at the Harvard Business School
Harvard Business School

Harvard Business School is a business school in the United States. It is one of the graduate schools of Harvard University.Founded in 1908, Harvard Business School started with 59 students....
 in 1926.






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Georges F. Doriot (September 1899 – June 1987) was one of the first American venture capitalists. In 1946, he founded American Research and Development Corporation
American Research and Development Corporation

American Research and Development Corporation was a venture capital and private equity firm founded in 1946 by Georges Doriot, the "father of venture capitalism" , with Ralph Flanders and Karl Compton ....
, the first publicly owned venture capital firm.

Biography


Youth, education and military service

Born in Paris
Paris

Paris is the Capital of France and the country's largest city. It is situated on the river Seine, in northern France, at the heart of the ?le-de-France Regions of France ....
, France
France

France , officially the French Republic , is a country whose Metropolitan France is located in Western Europe and that also comprises various Overseas departments and territories of France....
 in 1899, Doriot enlisted in the French army in 1920. He immigrated to America to earn an MBA
Master of Business Administration

The Master of Business Administration is a master's degree in business administration, which attracts people from a wide range of academic disciplines....
 and stayed on, becoming a professor at the Harvard Business School
Harvard Business School

Harvard Business School is a business school in the United States. It is one of the graduate schools of Harvard University.Founded in 1908, Harvard Business School started with 59 students....
 in 1926. He became a U.S. citizen in 1940 and the following year was commissioned a lieutenant colonel
Lieutenant Colonel

Lieutenant colonel is a rank of commissioned officer in the army and most Marine and air forces of the world, typically ranking above a major and below a colonel....
 in the United States Army Quartermaster Corps. As Director of the Military Planning Division, he worked on military research, development and planning, eventually being promoted to brigadier general
Brigadier General

Brigadier General is the lowest ranking General Officer in some countries, usually sitting between the ranks of Colonel and Major General.The rank can be traced back to the militaries of Europe where a brigadier general, or simply a brigadier, would command a brigade in the field....
.

ARDC and the Father of Venture Capital

In 1946 Doriot returned to Harvard and the same year he founded American Research and Development Corporation
American Research and Development Corporation

American Research and Development Corporation was a venture capital and private equity firm founded in 1946 by Georges Doriot, the "father of venture capitalism" , with Ralph Flanders and Karl Compton ....
 (ARDC), one of the first two venture capital
Venture capital

Venture capital is a type of private equity capital typically provided to early-stage, high-potential, Growth investing companies in the interest of generating a return through an eventual realization event such as an IPO or mergers and acquisitions of the company....
 firms along with Ralph Flanders
Ralph Flanders

Ralph Edward Flanders was an American mechanical engineer, industrialist and Republican Party United States Senate from the U.S. state of Vermont....
 and Karl Compton (former president of MIT), 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 although it had several notable investment successes as well.

In 1957, Doriot founded INSEAD, international graduate business school
Business school

A business school is a university-level institution that confers degrees in Business Administration. It teaches topics such as accounting, finance, information systems, marketing, organizational behavior, strategy, human resource management, and quantitative methods....
 in France
France

France , officially the French Republic , is a country whose Metropolitan France is located in Western Europe and that also comprises various Overseas departments and territories of France....
 with a group of his former Harvard MBA students. (Today, INSEAD is one of the major business schools, with campuses in Fontainebleau (France)
Fontainebleau

Fontainebleau is a commune in France in the aire urbaine of Paris, France. It is located south-southeast of the Kilometre Zero. Fontainebleau is a sous-pr?fecture of the Seine-et-Marne d?partement in France, being the seat of the Arrondissement of Fontainebleau....
 and Singapore
Singapore

Singapore , officially the Republic of Singapore, is an island country microstate located at the southern tip of the Malay Peninsula. It lies 137 kilometres north of the equator, south of the Malaysian state of Johor and north of Indonesia's Riau Islands....
.)

ARDC is credited with the first major venture capital success story when its 1957 investment of $70,000 in Digital Equipment Corporation (DEC) would be valued at over $355 million after the company's initial public offering in 1968 (representing a return of over 500 times on its investment and an annualized rate of return
Internal rate of return

The internal rate of return is a capital budgeting metric used by firms to decide whether they should make investments. It is also called discounted cash flow rate of return or rate of return ....
 of 101%). Until his death, Doriot remained friends with Ken Olsen
Ken Olsen

Kenneth Harry Olsen is an American engineer who co-founded Digital Equipment Corporation in 1957 with colleague Harlan Anderson and venture capital provided by Georges Doriot's American Research and Development Corporation....
, Digital's founder.

Later years

ARDC continued investing until 1971 with the retirement of Doriot. In 1972, Doriot merged ARDC with Textron
Textron

Founded in 1923 as the Special Yarns Company by Royal Little, Textron , today is a multi-industry company with a portfolio of familiar brands such as Bell Helicopter, E-Z-GO, Cessna Aircraft Company, and Greenlee, among others....
 after investing in over 150 companies. For his role in the founding of ARDC Doriot is often referred to as the "father of venture capitalism".

Doriot died of lung cancer in 1987 in Boston, Massachusetts
Boston, Massachusetts

Boston is the State capital and largest city of the Commonwealth of Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is considered the economic and cultural center of the region, and is sometimes regarded as the unofficial "Capital of New England." Boston city proper had a 2007 est...
.

Legacy

  • The Doriot Climatic Chambers
    Doriot Climatic Chambers

    The Doriot Climatic Chambers are a pair of very large, highly specialized wind tunnels located at the US Army?s United States Army Soldier Systems Center in Natick, Massachusetts....
     at the U.S. Army Soldier Systems Center
    U.S. Army Soldier Systems Center

    The United States Army Soldier Systems Center is a military research complex and installation in Natick, Massachusetts charged by the U.S. United States Department of Defense with the research and development of food, clothing, shelters, airdrop systems, and other servicemember support items for the U.S....
    , Natick, Massachusetts
    Natick, Massachusetts

    Natick is a town in Middlesex County, Massachusetts, Massachusetts, United States. Natick is located near the center of the MetroWest region of Massachusetts, with a population of 32,170 at the 2000 census....
     were named in his honor in 1994. (During his time in the US Army, Doriot had written and spoken about the need for an "Institute of Man" for the testing of soldiers and their equipment at environmental extremes. The DCCs are seen as a partial fulfillment of that vision.)


Quotes

  • "Be friendly but not chummy with your lawyer
    Lawyer

    A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an Attorney at law, counsel or solicitor; a person licensed to practice fraud." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain stability, and deliver justice....
    s."
  • "Someone, somewhere, is making a product that will make your product obsolete
    Obsolescence

    Obsolescence is the state of being which occurs when a person, object, or service is no longer wanted even though it may still be in good working order....
    ."
  • "When travelling, always adopt the psychology of a suitcase."


See also

  • American Research and Development Corporation
    American Research and Development Corporation

    American Research and Development Corporation was a venture capital and private equity firm founded in 1946 by Georges Doriot, the "father of venture capitalism" , with Ralph Flanders and Karl Compton ....
  • History of private equity and venture capital
    History of private equity and venture capital

    The history of private equity and venture capital and the development of these asset classes has occurred through a series of boom and bust cycles since the middle of the 20th century....
  • Private equity
    Private equity

    In finance, private equity is an asset class consisting of Stock securities in operating companies that are not publicly traded on a stock exchange....
  • Leveraged buyout
    Leveraged buyout

    A leveraged buyout occurs when a financial sponsor acquires a controlling interest in a company's ownership equity and where a significant percentage of the purchase price is financed through leverage ....