David Morgenthaler
Encyclopedia
David Turner Morgenthaler (born 1919) is an American businessman and capitalist who founded the venture capital
firm Morgenthaler Ventures. He was also instrumental in helping change the U.S. capital gains tax rate from 49% to 28% in 1978 and amending ERISA legislation to allow pension funds to invest in venture capital in 1979.
from Massachusetts Institute of Technology
(MIT) in 1941. While attending MIT, he was elected Vice President—and later became President—of the Senior Class (1940). He was also President of Sigma Nu
Fraternity (1938–39), Captain of the M.I.T. Swimming Team (1936–37), a member of Osiris, the senior honorary fraternity, and other class honorary societies.
On December 8, 1941, the day after the attack on Pearl Harbor
, Morgenthaler was called to active duty in the U.S. Army Corps of Engineers as a Second Lieutenant
in the 21st Aviation Engineer Regiment. He was promoted to Captain, commanding a line company in the North African campaign building airfields in French Morocco
, Algeria
and Tunisia
. Subsequently, in Italy, he was promoted to command the Headquarters and Service Company
of the regiment – one of the largest engineer units in the Mediterranean—and, in addition, was the Chief Technical Officer for the Area Engineer of Eastern Italy. Morgenthaler served as a Major in the U.S. Army Reserves until his discharge.
David married Lindsay Jordan in 1945 and has four children.
, one of the two original American venture capital firms, as President and CEO of their investee company, Foseco, Inc., one of their investments. He built this into the largest manufacturer of exothermic chemicals for foundries and steel mills in the U.S., and subsequently merged the company with its British licensor. Following this, he became Chairman for North America and helped to build a multinational enterprise of 57 corporations, manufacturing in 22 countries and warehousing and selling in 75 countries.
In 1968, he sold his interest in Foseco and founded Morgenthaler Associates and subsequently, Morgenthaler Ventures, one of the few venture capitalists to do so using his own capital. Over the next 42 years, Morgenthaler Ventures invested in more than 300 companies in information technology and life sciences and bought industrial companies as a private equity firm.
David Morgenthaler served as a Director, President or Chairman of more than 30 companies during his career, ranging from startups to billion dollar multinational corporations and in industries including metal fabrication, chemicals, information technology, life sciences and others. He served as an advisor to the Brentwood Associates
Funds, a limited partner of Hambrecht & Quist
, and as Vice Chairman of the Edison Biotechnology Institute.
David Morgenthaler served as one of the founding directors of the National Venture Capital Association
(NVCA) and served as Chairman of its Incentives Committee, working with the United States Congress
to improve conditions for venture capital and entrepreneurship. He was President and, subsequently, Chairman when the Steiger Amendment to the Revenue Act of 1978
was enacted, resulting in a roll-back of the capital gains tax
from 49% to 28%. Under his leadership, NVCA was also able to amend the Prudent Man Rule
of ERISA
to allow pension funds to invest in venture capital and to liberalize conditions for public offerings for small companies.
(YPO). An opponent of discrimination, he was acting Chapter Chairman of the Cleveland Chapter when the first Jewish member was admitted, and he was National Membership Chairman with the power of final decision when the first African-American was admitted into YPO. Upon graduation from YPO, David was admitted to the Chief Executive's Organization (CEO), the honorary group for former YPO leadership. He was elected President of CEO (1975–76).
Morgenthaler is a member of the President's Circle and a member of the Science, Technology and Economic Policy (STEP) Board of the National Academies. Morgenthaler's other activities include: Life Emeritus Trustee and Distinguished Fellow of the Cleveland Clinic
; Visiting Committee and Dean's Advisory Committee of MIT; Dean's Advisory Committee of the Tepfer School of Carnegie Mellon University
; Visiting Committee and President's Advisory Committee of Case Western Reserve University
; and Dean's Advisory Committee of the Weatherhead School of Management
of Case Western Reserve University.
Morgenthaler's philanthropic activities include funding: a professorship of entrepreneurship at Carnegie Mellon University
, a founding sponsorship of the Entrepreneurship Center at MIT, the Morgenthaler Fellows Program at the Cleveland Clinic
, the David T. Morgenthaler II Fellows Program at Stanford University
and the Einstein Society of the National Academies. At Stanford University
, the David T. Morgenthaler Grand Prize for the BASES (Business Association of Stanford Engineering Students) $50K Entrepreneurs' Challenge was established in his honor.
His awards include the first Lifetime Achievement Award granted by the NVCA in 1996, the Private Equity Lifetime Achievement Award, the Private Equity Analyst
's Hall of Fame, the Association for Corporate Growth
Lifetime Achievement Award, the Harvard Business School
"Entrepreneur of the Year" Award, one of the two first Honorary Fellows of the Kauffman Foundation, and the first Lifetime Achievement Award of the International Business Forum (IBF).
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
firm Morgenthaler Ventures. He was also instrumental in helping change the U.S. capital gains tax rate from 49% to 28% in 1978 and amending ERISA legislation to allow pension funds to invest in venture capital in 1979.
Biography
Morgenthaler received a S.B. and S.M. in Mechanical EngineeringMechanical engineering
Mechanical engineering is a discipline of engineering that applies the principles of physics and materials science for analysis, design, manufacturing, and maintenance of mechanical systems. It is the branch of engineering that involves the production and usage of heat and mechanical power for the...
from Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
(MIT) in 1941. While attending MIT, he was elected Vice President—and later became President—of the Senior Class (1940). He was also President of Sigma Nu
Sigma Nu
Sigma Nu is an undergraduate, college fraternity with chapters in the United States, Canada and the United Kingdom. Sigma Nu was founded in 1869 by three cadets at the Virginia Military Institute in Lexington, Virginia...
Fraternity (1938–39), Captain of the M.I.T. Swimming Team (1936–37), a member of Osiris, the senior honorary fraternity, and other class honorary societies.
On December 8, 1941, the day after the attack on Pearl Harbor
Pearl Harbor
Pearl Harbor, known to Hawaiians as Puuloa, is a lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. Much of the harbor and surrounding lands is a United States Navy deep-water naval base. It is also the headquarters of the U.S. Pacific Fleet...
, Morgenthaler was called to active duty in the U.S. Army Corps of Engineers as a Second Lieutenant
Second Lieutenant
Second lieutenant is a junior commissioned officer military rank in many armed forces.- United Kingdom and Commonwealth :The rank second lieutenant was introduced throughout the British Army in 1871 to replace the rank of ensign , although it had long been used in the Royal Artillery, Royal...
in the 21st Aviation Engineer Regiment. He was promoted to Captain, commanding a line company in the North African campaign building airfields in French Morocco
French Morocco
French Protectorate of Morocco was a French protectorate in Morocco, established by the Treaty of Fez. French Morocco did not include the north of the country, which was a Spanish protectorate...
, Algeria
Algeria
Algeria , officially the People's Democratic Republic of Algeria , also formally referred to as the Democratic and Popular Republic of Algeria, is a country in the Maghreb region of Northwest Africa with Algiers as its capital.In terms of land area, it is the largest country in Africa and the Arab...
and Tunisia
Tunisia
Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...
. Subsequently, in Italy, he was promoted to command the Headquarters and Service Company
Headquarters and Service Company
A Headquarters and Service Company is a company sized military unit, found at the battalion level and higher in the United States Marine Corps. In identifying a specific headquarters unit, it is usually referred to by its abbreviation as H&S...
of the regiment – one of the largest engineer units in the Mediterranean—and, in addition, was the Chief Technical Officer for the Area Engineer of Eastern Italy. Morgenthaler served as a Major in the U.S. Army Reserves until his discharge.
David married Lindsay Jordan in 1945 and has four children.
Career
Following military service, Morgenthaler joined an entrepreneurial team in founding a startup company and, later, served in several other such companies. As Vice President and Director of Sales of Delavan Manufacturing Company, he helped build the largest manufacturer of jet engine fuel nozzles in the world. Following this, he was recruited by J.H. Whitney & CompanyJ.H. Whitney & Company
J.H. Whitney & Company is a venture capital firm in the U.S., founded in 1946 by John Hay Whitney and his partner Benno Schmidt. Today the firm focuses primarily on leveraged buyouts, turnarounds, acquisitions, and recapitalizations of more mature companies particularly those it considers to be in...
, one of the two original American venture capital firms, as President and CEO of their investee company, Foseco, Inc., one of their investments. He built this into the largest manufacturer of exothermic chemicals for foundries and steel mills in the U.S., and subsequently merged the company with its British licensor. Following this, he became Chairman for North America and helped to build a multinational enterprise of 57 corporations, manufacturing in 22 countries and warehousing and selling in 75 countries.
In 1968, he sold his interest in Foseco and founded Morgenthaler Associates and subsequently, Morgenthaler Ventures, one of the few venture capitalists to do so using his own capital. Over the next 42 years, Morgenthaler Ventures invested in more than 300 companies in information technology and life sciences and bought industrial companies as a private equity firm.
David Morgenthaler served as a Director, President or Chairman of more than 30 companies during his career, ranging from startups to billion dollar multinational corporations and in industries including metal fabrication, chemicals, information technology, life sciences and others. He served as an advisor to the Brentwood Associates
Brentwood Associates
Brentwood Associates is one of the oldest private equity firms in the US with groups focusing on both leveraged buyout and venture capital investments....
Funds, a limited partner of Hambrecht & Quist
Hambrecht & Quist
Hambrecht & Quist was an investment bank based in San Francisco, California noted for its focus on the technology and internet sectors. H&Q was founded by William Hambrecht and George Quist in California, 1968....
, and as Vice Chairman of the Edison Biotechnology Institute.
David Morgenthaler served as one of the founding directors of the National Venture Capital Association
National Venture Capital Association
The National Venture Capital Association is the leading trade association representing the venture capital industry in the U.S. The NVCA represents the venture industry in public policy debates in Washington, DC, and promotes high professional standards, professional development, and interaction...
(NVCA) and served as Chairman of its Incentives Committee, working with the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
to improve conditions for venture capital and entrepreneurship. He was President and, subsequently, Chairman when the Steiger Amendment to the Revenue Act of 1978
Revenue Act of 1978
The United States Revenue Act of 1978, , amended the Internal Revenue Code by reducing individual income taxes , increasing the personal exemption from $750 to $1,000, reducing corporate tax rates , increasing the standard deduction from $3,200 to $3,400 ,...
was enacted, resulting in a roll-back of the capital gains tax
Capital gains tax
A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property...
from 49% to 28%. Under his leadership, NVCA was also able to amend the Prudent Man Rule
Prudent man rule
The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court decision, Harvard College v. Amory 9 Pick. 446...
of ERISA
Employee Retirement Income Security Act
The Employee Retirement Income Security Act of 1974 is an American federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans...
to allow pension funds to invest in venture capital and to liberalize conditions for public offerings for small companies.
Other affiliations
David Morgenthaler served as Cleveland Chapter Chairman, National Secretary and the first International Senior Vice President of the Young Presidents' OrganizationYPO
YPO may refer to:* Young Presidents' Organization* Peawanuck Airport...
(YPO). An opponent of discrimination, he was acting Chapter Chairman of the Cleveland Chapter when the first Jewish member was admitted, and he was National Membership Chairman with the power of final decision when the first African-American was admitted into YPO. Upon graduation from YPO, David was admitted to the Chief Executive's Organization (CEO), the honorary group for former YPO leadership. He was elected President of CEO (1975–76).
Morgenthaler is a member of the President's Circle and a member of the Science, Technology and Economic Policy (STEP) Board of the National Academies. Morgenthaler's other activities include: Life Emeritus Trustee and Distinguished Fellow of the Cleveland Clinic
Cleveland Clinic
The Cleveland Clinic is a multispecialty academic medical center located in Cleveland, Ohio, United States. The Cleveland Clinic is currently regarded as one of the top 4 hospitals in the United States as rated by U.S. News & World Report...
; Visiting Committee and Dean's Advisory Committee of MIT; Dean's Advisory Committee of the Tepfer School of Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
; Visiting Committee and President's Advisory Committee of Case Western Reserve University
Case Western Reserve University
Case Western Reserve University is a private research university located in Cleveland, Ohio, USA...
; and Dean's Advisory Committee of the Weatherhead School of Management
Weatherhead School of Management
The Weatherhead School of Management is a private business school of Case Western Reserve University located in Cleveland, Ohio. Weatherhead is considered a top-tier business school, with its strongest programs concentrated in organizational behavior, nonprofit business, information systems,...
of Case Western Reserve University.
Morgenthaler's philanthropic activities include funding: a professorship of entrepreneurship at Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
, a founding sponsorship of the Entrepreneurship Center at MIT, the Morgenthaler Fellows Program at the Cleveland Clinic
Cleveland Clinic
The Cleveland Clinic is a multispecialty academic medical center located in Cleveland, Ohio, United States. The Cleveland Clinic is currently regarded as one of the top 4 hospitals in the United States as rated by U.S. News & World Report...
, the David T. Morgenthaler II Fellows Program at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
and the Einstein Society of the National Academies. At Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
, the David T. Morgenthaler Grand Prize for the BASES (Business Association of Stanford Engineering Students) $50K Entrepreneurs' Challenge was established in his honor.
His awards include the first Lifetime Achievement Award granted by the NVCA in 1996, the Private Equity Lifetime Achievement Award, the Private Equity Analyst
Private Equity Analyst
Private Equity Analyst is a newsletter that since 1988 has provided news and information about the private-equity market and its investment specialities, including venture capital, leveraged buyouts, mezzanine investing and turnarounds....
's Hall of Fame, the Association for Corporate Growth
Association for Corporate Growth
The Association for Corporate Growth is the global community for mergers and acquisitions and corporate growth professionals, helping connect capital with opportunity. ACG provides its members with the research, tools and networking opportunities to grow their businesses and themselves...
Lifetime Achievement Award, the Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
"Entrepreneur of the Year" Award, one of the two first Honorary Fellows of the Kauffman Foundation, and the first Lifetime Achievement Award of the International Business Forum (IBF).
External links
- Morgenthaler (company website)
- Video interview