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Rediscovering Risk: Country Banks as Venture Capital Firms in the First Industrial Revolution

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  • BRUNT, LIAM

Abstract

Some English country banks were more like modern venture capital firms than modern banks in terms of legal and managerial structure, size and source of investment funding, size and nature of investments, and riskiness. This is exemplified by Praed & Co. of Truro, which was heavily engaged in financing the adoption of a risky new technology—Watt steam engines—by Cornish copper mines in the period 1775–1800. If some banks were proto–venture capital firms, rather than proto-banks, then their illiquid and relatively undiversified investment strategies are more reasonable and their bankruptcies more understandable: high-risk investments sometimes earn negative returns.

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  • Brunt, Liam, 2006. "Rediscovering Risk: Country Banks as Venture Capital Firms in the First Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 66(1), pages 74-102, March.
    • Handle: RePEc:cup:jechis:v:66:y:2006:i:01:p:74-102_00
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    Cited by:

    1. Bakker, Gerben, 2013. "Money for nothing: How firms have financed R&D-projects since the Industrial Revolution," Research Policy, Elsevier, vol. 42(10), pages 1793-1814.
    2. Ishizu, Mina, 2020. "'Money markets and trade’ defining provincial financial agents in England and Japan," LSE Research Online Documents on Economics 103159, London School of Economics and Political Science, LSE Library.
    3. Jaume Ventura & Hans-Joachim Voth, 2015. "Debt into growth: How sovereign debt accelerated the first Industrial Revolution," Economics Working Papers 1483, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Verdickt, Gertjan & Deloof, Marc, 2024. "Banking on innovation: Listed and non-listed equity investing, evidence from société générale de Belgique, 1850–1934," Explorations in Economic History, Elsevier, vol. 93(C).
    5. Patrick K. O'Brien & Nuno Palma, 2023. "Not an ordinary bank but a great engine of state: The Bank of England and the British economy, 1694–1844," Economic History Review, Economic History Society, vol. 76(1), pages 305-329, February.
    6. Nicola Visonà & Luca Riccetti, 2024. "Simulating the industrial revolution: a history-friendly model," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 19(4), pages 831-862, October.
    7. Ishizu, Mina, 2020. "'Money markets and trade’ defining provincial financial agents in England and Japan," Economic History Working Papers 103159, London School of Economics and Political Science, Department of Economic History.
    8. Mohajan, Haradhan, 2019. "The First Industrial Revolution: Creation of a New Global Human Era," MPRA Paper 96644, University Library of Munich, Germany, revised 17 Jul 2019.

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