The History and Future of Venture Capital Investing

Laurence Articles

Is venture capital a good investment? For long periods in the past, the best VC firms had spectacular returns, as their outside investors or “limited partners” — pensions, foundations, endowments, wealthy individuals – participated in the emergence of great companies such as Intel, Microsoft, Apple, and Amazon. But, going forward, can VC investors expect the same returns? Or are we in a new era of lower returns and a more challenging environment?

Innovation and the implementation of new technology, through the support of new businesses, has always been at the heart of economic progress. For centuries, this work was done by wealthy families, monarchs, and governments. But, starting in the mid-twentieth century in the United States, the VC firm, a wholly new type of investment management enterprise, began to seek and use capital from outside investors, as well as by the firm’s owners, to fund and nurture new business ventures.

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