Posts Tagged ‘BBN Technologies’

Georges Doriot Still Making News

December 5, 2009

Georges Doriot, the founding father of the venture capital industry and subject of my book Creative Capital, continues to pop up in the news. On Dec. 1, in the Financial Times, Luke Johnson, founder of the British private equity firm Risk Capital Partners, wrote an editorial, “A call to arms for ex-soldiers in business,” about the unique role that the military has played, and continues to play, in spurring innovation.

Johnson credits Doriot as the pioneer of the VC industry and for forming the “link between the military and venture capital.” As I argue in my book, Doriot learned how to become a VC during the war when he was in charge of research and development in the Quartermaster Corps of the U.S Army.

As further proof of his theory, Johnson mentions a new book, Start-up Nation, which explores the role that the Israeli military and social networks and leadership training provided by Israel’s mandatory military and reserve service has helped foster a vibrant entrepreneurial culture in the middle of the world’s most chaotic region. (At one point I considered calling my book Start-up Nation, too!)

For Doriot’s singular efforts, he was promoted to the high rank of brigadier general and was received the Distinguished Service Medal, the highest U.S. military medal given to a noncombatant, as well as being decorated a Commander of the British Empire and awarded the French Legion of Honor.

Also, the New England Journal of Technology recently ran an interview with Leo Beranek, a cofounder of BBN Technologies, a landmark technology company that was a leader in computer networking and communications. The interview was done by MassTLC chairman Steve O’Leary and Mass High Tech editor E. Douglas Banks. Beranek was presented with the Massachusetts Technology Leadership Council Commonwealth Award for lifetime achievement.

In the interview, Beranek is asked if he remembered Doriot. He replied:

“Venture capitalism really didn’t start until General Doriot came into the picture with the American Research and Development Corporation. But until then the banks were doing it. The banks were not taking any stock. They just lent you money, so they didn’t get to make any big profits from it.”

“Well, General Doriot was of course with the big venture capital firm, American Research and Development. He was very famous and very powerful because he was financing all these companies of which Digital Equipment is his most successful.”

And then he goes on to recount an amusing anecdote, which I never heard, about how Doriot threatened to sue BBN after they poached a star employee of one of the companies Doriot had invested in.