I’m a first-generation entrepreneur committed to learning as much about entrepreneurship as I can. The best way I’ve found to do that is to study entrepreneurs. So, every week, I share a book that I’ve read about an entrepreneur; most are biographies. I post my latest read every Sunday in the Library on this site.

A few years ago, I read The Power Law, which details the history of the venture capital industry, mostly focusing on San Francisco’s ecosystem and VC firms. As I continued learning venture capital history, I discovered Georges Doriot. He was a Harvard Business School (HBS) professor, and he founded one of the first venture capital firms in 1946. His firm, American Research and Development Corporation (ARDC), was publicly traded on the stock market. I didn’t know there was such a thing as a publicly traded VC firm; this intrigued me.  

I found a biography about Doriot’s life, Creative Capital, and gave it a read. Doriot was born in France and emigrated to the U.S. after his father’s factory was decimated in World War I. He was the first Frenchman to attend HBS and started as an investment banker in NYC but quickly became an assistant dean at HBS. This role morphed into his teaching a course and being promoted to an "Assistant Professor of Industrial Management."

An interesting part of this story is Doriot’s path through the Army during World War II, which was pivotal to his founding a VC firm. He managed procurement, which during a global war was no easy task. He and his team had to create products that met the unique needs of deployed troops (think boots that leave minimal footprints in the mud so enemy soldiers can’t track U.S. troops), have private companies manufacture products in sufficient quantities by certain dates (think General Motors building 100,0000 Jeeps in four months), and coordinate delivery of ungodly quantities of various goods and food to war zones. The team building, product development, and problem-solving skills he developed were invaluable and gave him experience managing chaos (which is valuable to entrepreneurs).

Also notable was that even in the early days of VC, the Power Law ruled returns. ARDC’s best investment, which made up the majority of its returns, was a $70,000 check into Digital Equipment Corporation (DEC) that turned into more than $200 million for ARDC, in large part due to ARDC owning over 50% of DEC when it went public.

This biography was well-researched and had a thorough bibliography and notes section. Anyone interested in learning about the birth of the venture capital industry or why VC firms don’t do well as public companies should consider reading Creative Capital.