ABSTRACT
The triad of Harvard Business School, MIT and the financial community legitimized the concept of venture capital to state governments and federal regulators. The financial community and its legal representatives provided the bulk of the funds as well as legitimacy in the business world, and also used their political connections to gain necessary changes in regulation and law to make the concept feasible. An observer commented: “Had not the investment bankers associated with this new company been willing to do a great deal more than ordinarily is expected of them, the new venture might well have died aborning.”17 They gained legal approval for financial institutions required by law to invest their funds conservatively to participate in the financing of a firm designed to act as an intermediary to transfer these funds to one of the riskiest of all business propositions: the start-up of a new firm.
