Before 1946, wealthy individuals and families dominated the venture capital  markets.  It became a defined industry in the 1950’s, primarily financed by wealthy individuals or syndicates.  Insurance companies and foreign investors were major players in VC in the 60s and 70s, followed by corporate pension funds beginning in the 70s, and public pension funds beginning in the 70s, and public pension funds in the 80s.  Currently, roughly 80% of money going into venture capital funds comes from institutional investors.

The beginnings of what would currently be recognized as the high technology focused segment of the venture capital industry began in the early 1970s - this period was marked by  investments in the nascent computer industry.  What delineates this period from prior ones is the emergence of a public stock market that would support liquidity of new and largely un-proven companies.  The rise of NASDAQ was a critical factor in the success of the new pioneer venture capitalists.  Three driving forces  - people, tech, and liquidity.

A major shift in the investor base ocurred in the early 80s, with the shift  in the laws regarding how pension funds could invest their money.  The ERISA statute was revised to allow for previously risky investments in private equity to be protected.  Pension funds put their stunningly large assets in play and the bonanza was on. A technological push brought on by microprocessors  and software and networking technologies further advanced investment activities in this sector. Medical devices and biotech industries began to attract cash.

There are several types of venture capital firms, but most mainstream firms invest their capital through funds organized as limited partnerships in which the venture capital firm serves as the general partner. The most common type of venture firm is an independent venture firm that has no affiliations with any other financial institution. These are called "private independent firms".
Venture firms may also be affiliates or subsidiaries of a commercial bank, investment bank or insurance company and make investments on behalf of outside investors or the parent firm’s clients. Still other firms may be subsidiaries of non-financial, industrial corporations making investments on behalf of the parent itself. These latter firms are typically called "direct investors" or "corporate venture investors."