Venture capital firms, during the twentieth century, were available to families and individuals that maintained considerable wealth. For instance, during that time, the Warburgs, the Rockefellers, the Whitneys, and the Vanderbilts were all families that supplied private funding to promising businesses. In the late 1930s, Douglas Aircraft and Easter Air Lines were privately funded by the Rockerfeller family. At this time, and the time prior to the second World War, venture capital was identified as development capital.
After the second World War, this type of funding became more available to small and large businesses on a larger scale. In the mid 1940s, two venture capital companies were developed: the J.H. Whitney & Company venture capital firm and the American Research and Development Corporation.
The American Research and Development Corporation® was established by a man named George Doriot. This man later became known as the father of venture capital funding. The company, at that time supplied funding to war veterans looking to establish businesses. Many future venture capital firms were established by the original employees of the first two venture capital companies.
In the late 1950s the passage of the Small Business Investment Act allowed for the SBA to offer small businesses startup capital. Later, in the '60s and '70s, this action expanded and existing venture capital firms began supplying businesses with funding for the purposes of either expanding or starting up businesses. Since many of the businesses that were assisted by venture capital firms at this time had something to do with the industry of technology, venture capital firms became known as a technology focused form of financing.
During the early 1980s venture capital firms began to flourish. Many companies were helping very successful companies become highly profitable. When the end of the decade hit, the number of venture capital firms increased from several dozen to well over six hundred companies. In the later 1990s another great boom for the venture capital firms was witnessed since there was a growing focus on computer technologies and the Internet. Today there are still many venture capital firms waiting to assist promising businesses with the funding and support they require to be successful.