Abstract: Draper, Gaither, and Anderson: First Venture Capital Firm in Silicon Valley

Leslie Berlin

Abstract

In September 1959, two military generals and the former chair of RAND and the Ford Foundation launched Draper, Gaither, and Anderson: the first venture capital firm in the region that would come to be known as Silicon Valley. Many elements of the modern venture capital firm—the partnership structure, the general/limited partner division of profits, the focus on profits as an end in themselves—can trace their roots to Draper, Gaither, and Anderson, which blended practices of famous family investors (the Rockefellers and Whitneys, for example) with the technology- and university-centered approaches pioneered by Georges Doriot at the Boston-based American Research and Development, the first venture capital firm in the United States (founded in 1946). Although Draper, Gaither, and Anderson has received almost no attention from scholars, this paper argues that the partnership's legacy, as well as its implications for the history of the early venture capital industry and of Silicon Valley, are substantial.