Timeline of Venture Capital
Venture capital from the agent-financed whaling voyages of 19th-century New England and the American Research and Development Corporation of 1946 through Silicon Valley, the dot-com bust and startup accelerators to the AI funding surge of 2025 – 2026.
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- 21 events 19th century – 2026
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- by claude-opus-5-5
19th century: Whaling agents spread investors' money across voyages
In New England whaling ports, above all New Bedford, Massachusetts, agents raised money from wealthy families, picked captains and spread capital across voyages that could last years, while crews were paid a "lay", a share of the catch, instead of wages. By the Harvard Business School historian Tom Nicholas's count, about a third of voyages earned nothing or lost money while a few paid off handsomely, a pattern he compares with modern venture funds.
https://en.wikipedia.org/wiki/Whaling_in_the_United_States1946: American Research and Development Corporation founded
Georges Doriot, a Harvard Business School professor, Massachusetts Institute of Technology president Karl Compton and former Boston Federal Reserve president Ralph Flanders set up the American Research and Development Corporation (ARD) to finance new technology companies. A publicly traded closed-end fund that drew capital from institutions rather than one family, it was one of the first modern venture capital firms; J.H. Whitney & Company, funded by John Hay Whitney, started at about the same time.
https://en.wikipedia.org/wiki/American_Research_%26_Development_Corporation1957: ARD invests $70,000 in Digital Equipment
Kenneth Olsen and Harlan Anderson, engineers from the Massachusetts Institute of Technology's Lincoln Laboratory, accepted $70,000 from the American Research and Development Corporation (ARD) for about 70 percent of Digital Equipment Corporation (DEC), which began in a former woolen mill in Maynard, Massachusetts. DEC's minicomputers made the stake worth about $355 million by 1971, and the deal became the model of the venture "home run": a single winner that pays for many losses.
https://en.wikipedia.org/wiki/Digital_Equipment_Corporation1957: Traitorous eight find backing for Fairchild Semiconductor
Eight scientists and engineers leaving William Shockley's laboratory in Mountain View, California, among them Robert Noyce, Gordon Moore and Eugene Kleiner, raised $1.38 million from Fairchild Camera and Instrument in a deal arranged by Arthur Rock and Alfred Coyle of the New York investment bank Hayden, Stone, after, by Rock's account, some 35 companies had turned them down. The fortunes Fairchild Semiconductor's founders later made helped turn such pairings of financiers and engineers into a regular business.
https://en.wikipedia.org/wiki/Traitorous_eight1958: Congress creates Small Business Investment Companies
The Small Business Investment Act let the Small Business Administration license private Small Business Investment Companies (SBICs) that borrowed federal money at favorable rates to invest in small firms, after Federal Reserve research found them short of long-term capital. About 700 operated by the mid-1960s. Georges Doriot of the American Research and Development Corporation refused the first license, judging government-backed debt unsuited to venture investing.
https://en.wikipedia.org/wiki/History_of_private_equity_and_venture_capital#Origins_after_WWII1959: Draper, Gaither & Anderson opens in Palo Alto
William Henry Draper Jr., a retired Army general, Frederick Anderson, a retired Air Force general, and H. Rowan Gaither, a former chair of the RAND Corporation and the Ford Foundation, formed what the historian Leslie Berlin calls the first venture capital firm in the future Silicon Valley. It was organized as a limited partnership, in which outside investors supplied the capital and the general partners shared in the profits, the structure most later venture funds adopted.
https://en.wikipedia.org/wiki/William_Henry_Draper_Jr.1972: Kleiner Perkins and Sequoia Capital founded
Eugene Kleiner, a Fairchild Semiconductor founder, and Tom Perkins, a Hewlett-Packard executive, opened Kleiner Perkins in Menlo Park, California, the first venture firm with an office on Sand Hill Road, whose name later became shorthand for the industry; its first fund was about $8 million. Don Valentine, a former Fairchild sales executive, founded Sequoia Capital, whose early investments included Atari and Apple.
https://en.wikipedia.org/wiki/Kleiner_Perkins1976: Kleiner Perkins funds Genentech
Robert Swanson, a former Kleiner Perkins associate, and Herbert Boyer, a biochemist at the University of California, San Francisco, founded Genentech to make medicines with recombinant DNA. Kleiner Perkins put in $100,000 from its roughly $8 million fund, though Perkins later said he thought the odds were better than even that they would lose it. One of the first biotechnology companies, Genentech made human insulin in bacteria in 1978.
https://en.wikipedia.org/wiki/Genentech1979: Labor Department clarifies the pension "prudent man" rule
The Employee Retirement Income Security Act (ERISA) of 1974 required pension managers to invest as a "prudent man" would, which many read as ruling out start-ups. A Department of Labor regulation published in June judged each investment by its role in the whole portfolio, so a small allocation to venture funds was no longer seen as imprudent. With a 1978 cut in capital gains tax, it helped make pension funds the main source of new venture money.
https://en.wikipedia.org/wiki/Prudent_man_rule1980: Genentech and Apple go public
Genentech's shares, offered on October 14 at $35, reached $88 within an hour of trading, and Apple, whose backers included Venrock, Sequoia Capital and Arthur Rock, sold 4.6 million shares at $22 on December 12. Such windfalls, with pension money now available, drew a surge of commitments to new venture funds in the early 1980s; the growth stalled after 1983 as more firms competed for deals and the market for initial public offerings cooled.
https://en.wikipedia.org/wiki/History_of_Apple_Inc.#Apple_IPO1993: Israel launches the Yozma program
Israel's government committed about $100 million to Yozma, supplying up to 40 percent of the capital of ten privately managed venture funds partnered with experienced foreign investors. Private partners received an option to buy the state's share at cost plus interest, letting them retain most of the upside. Most exercised the option, and the government withdrew from the program in the late 1990s.
https://en.wikipedia.org/wiki/Yozma1995: Netscape goes public before turning a profit
Netscape, maker of the Navigator web browser, had been founded 16 months earlier by Jim Clark and Marc Andreessen with backing from Kleiner Perkins, and had yet to make a profit. Its shares, offered at $28 on August 9, closed the first day at $58.25, valuing the company at $2.9 billion. The sale helped start a rush of internet listings, and money committed to venture funds rose steeply through the rest of the decade.
https://en.wikipedia.org/wiki/Netscape#Initial_public_offering_(IPO)2000: Dot-com bubble bursts
The Nasdaq Composite index, home to most new technology listings, peaked on March 10 and had fallen 78 percent by October 2002. US venture investment, roughly $94 – 105 billion in 2000 depending on the count, dropped to about $20 billion in 2002; many funds wrote off much of their portfolios, some investors sold fund commitments at steep discounts, and acquisitions replaced listings as the usual exit.
https://en.wikipedia.org/wiki/Dot-com_bubble2005: Y Combinator funds its first batch of startups
Paul Graham, Jessica Livingston, Robert Morris and Trevor Blackwell started Y Combinator in Cambridge, Massachusetts, with $200,000 put up by Graham, Morris and Blackwell, giving a group of new companies small investments and advice together over one summer. The Brookings Institution describes it as the first startup accelerator; Techstars followed in Boulder, Colorado, in 2006, and US accelerator programs grew from 16 in 2008 to about 170 by 2014.
https://en.wikipedia.org/wiki/Y_Combinator2013: Billion-dollar startups dubbed "unicorns"
In a TechCrunch article on November 2, the venture investor Aileen Lee called US software companies founded since 2003 and valued at $1 billion or more "unicorns" for their rarity, counting 39, some of them already public. As such companies multiplied and stayed private longer, the word came to mean privately held startups worth at least $1 billion; CB Insights counted more than 1,200 worldwide by 2024.
https://en.wikipedia.org/wiki/Unicorn_(finance)2013: Y Combinator introduces the SAFE
Y Combinator published the simple agreement for future equity (SAFE), written by its partner Carolynn Levy, as a lighter alternative to convertible notes for seed investments. The investor's money turns into shares at a later priced round, usually on terms set by a valuation cap or discount, but unlike a note a SAFE is not debt and has no interest or maturity date. It spread widely in the US, Canada and Israel, and Y Combinator switched to a "post-money" version in 2018.
https://en.wikipedia.org/wiki/Simple_agreement_for_future_equity2014: Alibaba's New York listing rewards SoftBank's early bet
Alibaba, an e-commerce company founded in Hangzhou in 1999, raised $25 billion including an overallotment option when it listed on the New York Stock Exchange on September 19, then the largest initial public offering on record. Japan's SoftBank, which had led a $20 million investment in 2000 and later added to it, held about 32 percent; Reuters Breakingviews valued that stake at almost $75 billion at the first day's close.
https://en.wikipedia.org/wiki/Alibaba_Group#IPO2017: SoftBank launches its Vision Fund
SoftBank Group announced a first close of more than $93 billion for its Vision Fund; the other investors included Apple, Foxconn, Qualcomm, Sharp, Abu Dhabi's Mubadala and Saudi Arabia's Public Investment Fund, which was reported to have committed $45 billion. Far larger than any earlier fund for private technology companies, it lost heavily on bets such as WeWork, whose 2019 listing was withdrawn, and reported a loss of about $18 billion for the year to March 2020.
https://en.wikipedia.org/wiki/SoftBank_Vision_Fund2021 – 2023: Venture deal value hits a record, then halves
With interest rates near zero, US venture deal value reached a record of about $358 billion in 2021 by the count of PitchBook and the National Venture Capital Association (NVCA), and a record number of startups reached valuations of $1 billion. After the Federal Reserve began raising rates in 2022, deal value fell to about $236 billion that year and $169 billion in 2023, and many unicorns' valuations were cut.
https://en.wikipedia.org/wiki/Unicorn_(finance)2023: Silicon Valley Bank fails in a startup-driven run
Silicon Valley Bank, which by its own account served nearly half of US venture-backed technology and life-science companies, lost over $40 billion in deposits on March 9 in a run that the Federal Reserve later tied partly to its concentrated network of venture investors and tech firms; California regulators closed it on March 10. On March 12 the Treasury, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) invoked a systemic risk exception to protect all its depositors.
https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Bank2025 – 2026: AI companies take most US venture money
Artificial intelligence companies received 65.4 percent of US venture deal value in 2025, according to PitchBook and the National Venture Capital Association. Their share rose to 82.7 percent in the first three quarters of 2026, when total deal value reached about $516 billion. In March 2026, OpenAI announced a $122 billion funding round in committed capital, anchored by Amazon, Nvidia and SoftBank, illustrating the concentration of funding in a few large companies.
https://en.wikipedia.org/wiki/AI_boom