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

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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.