Scottish immigrant Jim Dunlop founded the Jim Dunlop Company in 1965 as a part-time business while working as a processing and chemical engineer at Barr and Stroud in Glasgow. He was an apprentice of creator of the first hip replacement, William "Bill" Wallace. His first product was the Vibra-Tuner, a small device that attached to a guitar with a suction cup and displayed whether the guitar was in tune with the vibration of a small reed.

While visiting music stores to sell his new product, someone told him that musicians needed a good capo, remarking that anyone who made a good capo that could handle a 12-string guitar would make a lot of money. Using his engineering background, Dunlop created the toggle capo, and then worked with a local machine shop to build the first capo dies, manufacturing what eventually became the long running "1100 series" capo.