Cooper: 1970s Prudent Man Rule changes unlocked institutional venture capital
Scott Kupor · How to Understand and Choose a Venture Investor · Jun 14, 2019 · at 7:19
Scott Cooper of Andreessen Horowitz explains the historical origin of institutional money flowing into venture capital funds.
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“Before the kind of mid-nineteen seventies, you know, institutional asset managers like Yale actually were prohibited from being able to invest in assets like venture capital that were considered too risky, and, you know, kind of, there were a lot of changes that came along the way, but Basically, kind of, there was this thing called the prudent man rule which came in and said, hey, we think it's actually reasonable for pensions and other people to invest in these assets as long as they do it, of course, in a reasonable way. And that really opened up the floodgates kind of in the mid and late 19 seventies to venture in private equity as a broad institutional asset class.”
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