How it started
Founding and early history
J. H. Whitney & Company was founded by John Hay Whitney, who put up $10 million after World War II to finance entrepreneurs with business plans who were unwelcome at banks. Mr. Whitney brought in Benno Schmidt as his partner to run the company.
When starting the company, Whitney wanted a broad team of young experts to be his deputies. He went to the deans of Harvard Business School, Yale Law School, and the MIT Graduate School of Engineering and asked each man who the best student they produced in the past five years was. The HBS dean cleverly responded that he was insulted that Whitney would think that he would simply rank his best students and hand the list out, but that if he was to do such an outrageous thing, he would rank C. Wrede Petersmeyer, a graduate the previous year, first. Whitney hired Petersmeyer the next day, and he went on to become a partner at the firm and run Whitney Communications.
Whitney had been investing since the 1930s, founding Pioneer Pictures in 1933 and acquiring a 15% interest in Technicolor Corporation with his cousin Cornelius Vanderbilt Whitney. What is considered today to be true private equity investments began to emerge after World War II, marked by the founding of the first two venture capital firms in 1946: American Research and Development Corporation and J. H. Whitney & Company.
Whitney became a highly professional organization, whereas before World War II, venture-capital investments were primarily the domain of wealthy individuals and families. Schmidt, in fact, is credited with coining the term "venture capital", originally known as "development capital". The company was originally described as a lender of "private adventure capital" and Schmidt shortened the term.
By far, Whitney's most famous investment during this period was in Florida Foods Corporation. The company developed an innovative method for delivering nutrition to American soldiers, which later came to be known as Minute Maid orange juice, and was sold to the Coca-Cola Company in 1960.
From Wikipedia’s article on J.H. Whitney & Company, shared under CC BY-SA 4.0.2