Venture Capital and Financial Organisation: London and South Africa in the Nineteenth Century

The American comedian Bob Hope once defined a bank as ‘a place that will lend you money if you can prove that you don’t need it’.1 Interpreting his quip, we might say that a bank is a financial institution that conventionally avoided taking significant risk; historians have traced a long succession of ‘lock-ups’ of bank capital that have brought the unwary to their knees and generated the conventional wisdom behind bank policy.2 But it is equally clear that for generations this caution left a large gap in national and international money markets, that of supplying capital for investment where there is recognised to be significant risk. This sector of the market is now known as the venture capital market, and it is important to recognise that it has a history of its own.