Raising capital is at the heart of building great companies. Today, founders often talk about “Seed rounds” or “Series A,” while others navigate SEC regulations like Reg CF or Reg D. But how did U.S. companies raise capital before all this?
Let’s take a journey through history—from Wall Street’s early days to the modern startup era—to understand how capital raising evolved.
1700s–1800s: The Birth of Public Markets
- In 1792, 24 brokers signed the Buttonwood Agreement, creating what we now know as the New York Stock Exchange (NYSE).
- Early American companies—especially in railroads, banks, and shipping—raised funds through public share offerings or private subscriptions.
- There were no regulators, and securities were often unregulated, risky, or speculative.
Early 1900s: Rise of Institutional Power
- Industrial giants like Rockefeller, Carnegie, and Morgan dominated the capital landscape.
- Companies relied on:
- Private bank financing
- Private placements among elites
- Occasional IPOs (Initial Public Offerings) for expansion
- This was a period of massive corporate consolidation, often funded by personal or institutional wealth.
⚖️ 1930s: Crash, Crisis, and the Birth of the SEC
- The 1929 stock market crash exposed widespread fraud and investor losses.
- The U.S. responded with:
- Securities Act of 1933 – required public companies to register with the SEC.
- Securities Exchange Act of 1934 – created the Securities and Exchange Commission (SEC).
- From this point, public offerings were heavily regulated, and private placements continued quietly in the background.
1940s–1960s: Venture Capital is Born
- Post–World War II, the U.S. saw a surge in innovation—and a new form of capital to match.
- In 1946, American Research and Development Corporation (ARDC) became one of the first true venture capital firms.
- Early VC investments (e.g., Digital Equipment Corporation in 1957) were made without formal “series” labels.
- Deals were still very relationship-based and lacked structured naming.
1970s–1990s: VC Gets Organized — Series A is Born
- As startups needed multiple rounds of funding, VCs began formalizing:
- Series A = first priced equity round
- Series B/C/D = growth rounds at higher valuations
- The names helped track:
- Priority of investor rights
- Dilution and valuation changes
- Company maturity
Still today, there is no legal definition of “Series A” — it’s a market convention, not a regulation.
2000s–Today: Startups Go Further, Faster
- New tools emerged:
- SAFEs (Simple Agreements for Future Equity)
- Convertible Notes
- Crowdfunding via Reg CF and Reg A+
- Founders now combine regulatory paths (like Reg D or CF) with traditional funding rounds depending on growth strategy and investor base.
- Companies stay private longer, raise larger private rounds, and increasingly invite public participation via regulation exemptions.
Key Takeaways
| Era | Capital Strategy | Tools Used |
| 1700s–1800s | Public subscriptions, IPOs | Shares, early exchanges |
| 1900s–1929 | Private wealth, banks | Loans, stock |
| 1930s–1940s | Regulated offerings | SEC rules begin |
| 1950s–1970s | Early VC | Convertible notes, equity |
| 1980s–2000s | Formal venture rounds | Series A–D, LPs, VCs |
| 2010s–Now | Hybrid models | Reg CF, Reg A+, SAFEs, Series naming |
Final Word
While the concept of “Series A” is only a few decades old, the need to raise capital has driven innovation for centuries.
At MYDENTALWIG, we embrace modern fundraising with historic perspective. That’s why we started with Reg CF, moved to Reg D, and continue inviting all types of investors—not just the few—to build something lasting.
Related Reads
- Reg CF vs Series A — What’s the Difference?
- Why MYDENTALWIG Chose Regulation Funding Over Traditional VC