Doriot: Immigrant, Military Veteran, Father of Venture Capital

We launch the INSEAD Angels group in the Silicon Valley inspired by the founder of our business school George Doriot. He was an immigrant and a visionary business leader who laid the foundation for venture capital models that champion innovative entrepreneurs.

George Doriot, founded the American Research and Development Center (ARDC), an organization that encouraged investments from the private sector into entrepreneurial ventures started by military veterans returning from World War II. Through ARDC, equity ownership in early stage high growth businesses through a venture capital investment was institutionalized into an asset class. Doriot was born in Paris, France in 1899 and enlisted in the French army in 1920. A few short years later, he immigrated to America to pursue and earn his MBA from Harvard Business School, eventually becoming a professor there afterwards. Doriot became an American citizen in 1940, and just a year later accepted a commission as a lieutenant colonel in the U.S. Army Quartermaster Corps. He went on to become the director of the U.S. Army’s Military Planning Division during World War II and was later promoted to brigadier general.

Before the founding of the ARDC, development capital exchanged hands primarily between the wealthy and their family members (now known as “family offices”). The ARDC became the first institutional private equity investment company that collected its funding resources outside of these traditional sources. ARDC’s initial significant venture capital investment came in 1957 when it invested $70,000 into Digital Equipment Corporation (DEC). After 11 years of development, DEC debuted their initial public offering valued at more than $355 million. This represented a return of over 5000 times ARDC’s initial investment, and an annualized rate of return of 101%.

Doriot is regarded as a visionary leader. He cultivated personal developments within his students and employees, and encouraged them to seek individual entrepreneurial endeavors, even if that meant he would convert employees into competitors. Doriot retired from the ARDC in 1971, after investing in over 150 profitable companies, and in 1972 the ARDC merged with Textron, giving birth to an industry, as many of Doriot’s employees left ARDC and founded their own firms. Doriot believed that entrepreneurship was a powerful source for economic progress and was later named one of the Top 100 people who shaped the American economy.

In 1956, Doriot somehow found time to return to France to found INSEAD, Europe’s first business school. Today, INSEAD is currently ranked #1 in the world among business schools (by Financial Times, 2016), and an alumni network that is comprised of 52,000 professionals, spanning 173 countries. Many of these alumni, including members of the INSEAD Angels Silicon Valley, continue the tradition that Doriot helped found, by encouraging and fostering entrepreneurship through investment and education while embracing the values of diversity, inclusion and tolerance that have made Americans great.

Posted by Gopi Rangan, Organizing Director, INSEAD Angels

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