French politicians often look enviously across the Atlantic at the entrepreneurial successes of the U.S. economy, such as Google Inc., Apple Inc., Intel Corp. and Microsoft Corp. So it is a heavy irony that the man who founded the U.S. venture capital industry, helping to create many multibillion-dollar companies, came from France.
In "Creative Capital," Spencer E. Ante, a Business Week journalist, recounts the life of a 20th century Renaissance man, Georges Doriot.
Born in Paris in 1899, Doriot was the only son of a promising industrialist at the Peugeot car company and his schoolteacher wife. At age 21, Doriot sailed by steamship to the U.S. from his native France and went on to become a brigadier general in World War II, one of the most influential professors at Harvard Business School and founder of Instead, Europe's first business school.
But his main achievement was to pioneer the U.S. venture capital industry in 1946 by setting up American Research & Development, which backed one of the first blockbuster technology start-ups, Digital Equipment Corp.
The book charts Doriot's early years in minute detail. This makes the first chapters heavy going, especially after Doriot's arrival in the U.S. as he graduates from Harvard and starts work at Kuhn, Loeb & Co. on Wall Street before returning to Harvard as a professor. It takes almost half the book for American Research & Development to appear.
Yet it unearths some interesting anecdotes, such as how Doriot received the Distinguished Service Medal, the highest military award for a non-combatant, for running the army's resources division. His unit developed many innovative pieces of military equipment, including the "Doron" plastic flak jacket, named after him.
The book chronicles how "the war was a watershed for entrepreneurialism" as high levels of military research spending created a fertile climate for high-tech start-ups. Doriot, with backing from MIT, formed ARD as the first professional venture capital firm to raise money from non-family sources.
After a frantic struggle, the Boston-based firm raised $3.5 million, well below its $5-million target, by selling shares to a small group of investors.
Its early years were marked by several misses, such as an investment in a Fiji tuna fishing company that went bust.
