Custom Search
Entrepreneurial Capitalism and Innovation:
A History of Computer Communications 1968-1988
By James Pelkey

Entrepreneurial Capitalism & Innovation:
A
History of Computer Communications
1968 -1988
By James Pelkey

This history is organized by three co-evolving market sectors and also standards making.
An overview of the schema is presented in the Introduction.

DATA COMMUNICATON
Ch. 1: Emergence
Ch. 3: Competition
Ch. 5: Market Order
Ch. 11: Adaptation

NETWORKING
Ch. 2: Vision
Ch. 4: Arpanet
Ch. 6: Diffusion
Ch. 7: Emergence
Ch 8: Completion
Ch. 10: Market Order

STANDARDS
Ch. 9: Creation

INTERNETWORKING
Ch. 12: Emergence

 

 

Chapter 7
Networking: Emergence 1979-1981
LANs and Data PBXs

7.10     The Return of Venture Capital

In 1978, the attractiveness of venture capital received a shot in the arm that transformed the industry from having lived on life-support for seven years to a robust institution. The 1978 Revenue Act reduced the capital gains rate from 49 1/2% to 28%. The flow of monies into venture capital funds jumped from $68 million to nearly $1 billon. Then in 1979, Congress passed the ERISA “Prudent Man” Rule that allowed pension funds to invest in venture capital. Again, venture capital benefited. By 1983, new commitments exceeded $5 billion.

Exhibit 7.1
Net New Commitments to Venture Capital Firms1977 to 1983 [5]
(Millions)

1977

1978

1979

1980

1981

1982

1983

68.2

978.1

449.2

961.4

1627.8

2118.6

5097.7

For entrepreneurs needing venture capital it was if the stoplight that had been stuck on red had turned green. The impact on networking would be immediate.


[5] Source of data: Venture Economics, Venture Capital Yearbook 1988, p. 17 Entries are presented in 1987 dollars, deflated using the GNP deflator. From NBER Working Paper Series: Venture Capital and Capital Gains Taxation, James M. Poterba, Working Paper No. 2832