Georges Frédéric Doriot ( , ; 24 September 1899 – 2 June 1987) was a French-born American professor, military officer and venture capitalist.
Born in Paris, Doriot emigrated to the United States and joined Harvard Business School as a professor of industrial management. Over four decades his "Manufacturing" course trained thousands of students, many of whom became prominent business executives and venture investors.
During World War II, Doriot became a naturalized American citizen and served in the Quartermaster Corps, where he directed military procurement research covering technologies from synthetic rubber to rations. He was promoted to brigadier general and received the Distinguished Service Medal.
After the war, Doriot led American Research and Development Corporation (ARD) for twenty-five years. As president, he led the first venture capital firm to raise money from institutional investors rather than family wealth. He has been described as the "father of venture capital."
In 1957, Doriot was instrumental in founding INSEAD in his home country, France, and setting up its foundational values. INSEAD is now one of the world's leading business schools.
Early life and education Georges Frédéric Doriot was born in Paris on 24 September 1899, to Berthe Camille Baehler and Auguste Doriot, a motorist, engineer, and automobile manufacturer who owned D.F.P. and had worked closely with Armand Peugeot. Georges was born in the Peugeot house in the 17th arrondissement. He grew up in a strict Lutheran household, and frequent childhood visits to his father's automobile factories gave him an early familiarity with manufacturing.
In 1917, at age seventeen, Doriot enlisted in the French army and served in an artillery vehicle unit, receiving a battlefield commission as an officer. He returned to his studies after the armistice and received a baccalaureate in science from the University of Paris in 1920.
The war had ruined the family's finances. Auguste Doriot's automobile plants had been converted to war production, and his attempt to restart an automotive business after the war failed for lack of backing. On his father's advice, Doriot emigrated to the United States in 1921, intending to study factory administration at the Massachusetts Institute of Technology (MIT). He carried with him a letter of introduction to A. Lawrence Lowell, the president of Harvard University, written by a family friend. The Doriots had not heard of the university, but Lowell met Doriot on his arrival in Boston and persuaded him to enroll in the new Harvard Business School instead of MIT.
Doriot spent one year at Harvard as a "special student," lacking the undergraduate degree normally required for admission. Like most of his classmates he left after the first-year core curriculum without completing the MBA, and took a position on Wall Street.
Early career In late 1921, Doriot joined New York & Foreign Development Corporation, an affiliate of the investment bank Kuhn, Loeb & Co., where the two firms shared offices at 52 William Street in lower Manhattan. His principal work was evaluating new technologies for possible investment, and he was appointed one of seven directors of a new company organized by the Kuhn, Loeb partners to develop industrial processes. He was twenty-four. During these years he also published articles in the New Republic on the repatriation of war debts.
Kuhn, Loeb was a family firm, and its partnerships went to relatives or those who married into the family. Doriot had neither connection nor interest in accumulating the wealth that banking demanded. When Harvard Business School dean Wallace B. Donham offered him a position as assistant dean in 1925, he accepted. The assistant deanship was an administrative role, but after Doriot criticized the school's second-year course on factory production, Donham removed its instructor and told Doriot to teach it himself. Doriot would later recall that the assignment caught him off guard: "Well, I didn't know if I could teach or not. At least it was a subject that I felt close to."
In 1929, Donham promoted Doriot to full professor of industrial management. He was thirty years old and had been teaching for four years. The promotion coincided with Doriot's efforts to export American-style business education to France. He had spent the summer of 1929 at the Paris Chamber of Commerce, translating Harvard case studies and helping plan what became the Centre de perfectionnement aux affaires (CPA), an executive training program. The historian Jean-Louis Barsoux later wrote that this "may well have been the first middle management program anywhere," as Harvard itself did not offer executive education until 1943.
In 1930, Doriot married Edna Allen, a Harvard research assistant. They had no children; Morris notes that they apparently concluded they could not afford to raise a family on a professor's salary during the Depression.
The Depression years The stock market crash of 1929 and the Depression that followed brought Doriot an extraordinary volume of consulting work. Between 1932 and 1941, he served on the boards of some twenty companies and held executive positions in ten others, an amount of outside work that would not be permitted under modern governance standards. In 1940, he became president of the struggling McKeesport Tin Plate Corporation and put it on firmer footing by negotiating the sale of its tin plate division to Jones & Laughlin.
Doriot's teaching also evolved during these years. In 1937, he adapted his courses into a new second-year elective called simply "Manufacturing," whose purpose was to train students in the analysis and administrative control of a manufacturing company with emphasis on "new products, new ideas, new developments and new questions of research." Despite its prosaic name, the course ranged broadly over leadership, entrepreneurship, and the management of innovation. It ran from 1937 until Doriot's compulsory retirement in 1966 and enrolled some 7,000 students. His graduates, known as "Doriot Men," included Philip Caldwell of Ford Motor Company, John Diebold, Dan Lufkin of Donaldson, Lufkin & Jenrette, and James D. Robinson III of American Express.
At the same time, Doriot was drawn into discussions about the economic future of New England. The region's textile and garment industries were in terminal decline, and in 1939 the New England Council formed a committee, chaired by MIT President Karl Compton, to examine how new products might reverse the trend. The committee brought together Compton, Doriot, Ralph Flanders of the Federal Reserve Bank of Boston, and Merrill Griswold of Massachusetts Investors Trust, among others. Doriot chaired the subcommittee on "Development Procedures and Venture Capital." Their work was interrupted by American entry into World War II, but the relationships formed in the committee would become the nucleus of the venture capital industry after the war.
Military service As France fell in 1940, Doriot approached the French embassy in Washington about supporting the war effort. He was offered a position as a limousine driver to the ambassador and walked out. His expertise in manufacturing had attracted the attention of American military leaders. William J. Donovan arranged a meeting with President Roosevelt, who appealed for Doriot's help improving military readiness despite his French citizenship. Doriot became a naturalized U.S. citizen in January 1940.
In the spring of 1941, his former student Edmund B. Gregory, the newly appointed Quartermaster General, recruited him into the Quartermaster Corps as a lieutenant colonel in charge of expediting procurement. Doriot's first task was persuading Detroit automakers to retool factories for Army trucks. When Japan captured Malaya's natural rubber supply in late 1941, he turned to the rubber crisis: his February 1942 memorandum outlined what became the U.S. rubber rationing program and initiated a federal program for synthetic alternatives that Roosevelt announced publicly. The synthetic rubber industry that grew from these wartime investments now accounts for the majority of American rubber production.
In July 1942, the Quartermaster Corps created a Military Planning Division and placed Doriot over its research functions. His programs concentrated on improving conditions for ordinary soldiers: water-repellent fabrics, durable boots, insulated fatigues, and insecticides were among the innovations his teams developed or contracted. In October 1943, he was made director of the full Planning Division, a contracting organization that grew from 500 to 2,000 civilians and handled several billion dollars in procurement research, covering everything from trucks and uniforms to the Army's letter-graded field rations.
One program bore Doriot's name directly. In 1943, responding to wartime metal shortages, his division initiated development of plastic-laminated body armor. Dow Chemical manufactured plates of fiberglass and resin, which Doriot's researchers named "Doron" in his honour. The armor debuted at the Battle of Okinawa and was later adapted for pilots' flak jackets in the Korean War.
Doriot was promoted to brigadier general in February 1945, a rare distinction in the Quartermaster Corps. He was discharged in May 1946 and received the Distinguished Service Medal, followed later by appointment as a Commander of the British Empire and the French Legion of Honor.
During the Army's post-war reorganization, Doriot proposed consolidating the Quartermaster General's scattered research programs at a single facility in the Boston area. After several years of bureaucratic negotiation, the Quartermaster Research and Development Center was established in Natick, Massachusetts. The facility's Doriot Climatic Chambers, used for testing soldiers and equipment at environmental extremes, were named in his honour in 1994.
American Research and Development Corporation
Founding The wartime interruption had shelved but not killed the New England Council's plans for an organized venture capital fund. In 1943, the council held meetings with representatives of banks, insurance companies, and investment trusts to gauge their willingness to provide capital for new enterprises; all reported that their institutional mandates prevented them from making such investments directly. Ralph Flanders, who had become president of the Federal Reserve Bank of Boston, argued publicly that the nation's growing concentration of wealth in fiduciary hands left new enterprises starved for capital. "We need new strength, energy and ability from below," Flanders wrote. "We need to marry some small part of our enormous fiduciary resources to the new ideas which are seeking support."
American Research and Development Corporation (ARD) was incorporated in June 1946. Its founders included Flanders, Karl Compton, HBS dean Donald K. David, and Merrill Griswold. In December 1946, after his release from the Army, Doriot became president, a position he held for twenty-five years. Limited interest from institutional investors forced ARD to raise its initial capital through a public stock offering; the company sold roughly 140,000 shares and collected $3.5 million from insurance companies, investment trusts, university endowments at MIT, Rice, Penn, and Rochester, and individual investors. It was the first venture capital enterprise to raise capital from institutions rather than family wealth.
Investment philosophy and early portfolio