Which organization did Georges Doriot co-found in 1946 as the first modern venture-capital firm?

Georges Doriot co-founded American Research and Development Corporation in 1946 as the first modern venture-capital firm.

Doriot, a Harvard Business School professor and former U.S. Army officer, founded ARDC with Ralph Flanders and Karl Compton. The organization was created to invest private capital in businesses commercializing technologies developed during and after World War II.

ARDC became especially famous for its investment in Digital Equipment Corporation, commonly known as DEC. Its 1957 investment of about $70,000 ultimately produced a return worth hundreds of millions of dollars when DEC went public. That result helped demonstrate the potential of professionally managed equity investment in young technology companies.

ARDC was not the first organization ever to finance new businesses, and “venture capital” existed in informal forms earlier. Its importance lies in combining outside investors, professional management, and equity stakes in emerging companies. ARDC was acquired by Textron in 1972.