Proposal for the Organization and Financing of Digital Computer Corporation

This document outlines the proposal by American Research and Development Corporation (ARD) to finance the establishment of Digital Computer Corporation. The new company, led by M.I.T. Lincoln Laboratory technologists Kenneth H. Olsen and Harlan E. Anderson, aims to manufacture and sell transistorized digital building block units. The proposal covers:

• Business Plan: Initial focus on building block units, with plans to expand into terminal equipment, power supplies, and specialized digital systems.
• Financing: Recommends an initial investment of $250,000 from ARD, with $100,000 provided immediately and the remaining $150,000 contingent on future need and approval.
• Management: Details the founders' technical backgrounds and technical accomplishments while noting their lack of business experience, necessitating the addition of a third management member.
• Market Analysis: Assesses the current competitive landscape, identifying only two minor direct competitors and citing the significant, though quantitatively undefined, market for their products.
• Field Investigation: Reports positive, although cautious, feedback from industry experts and colleagues, with one dissenting viewpoint regarding the capital intensity and risks involved in entering the digital equipment business.