The Sand Hill Road is practically synonymous with Silicon Valley and the world of startups. Almost every founder of today’s tech giants has pitched an idea here to get funding from the mighty VCs. 3000 Sand Hill is the place where some of the largest deals ever have been made over a cup of coffee at the Sundeck cafe.
The significance of the Sand Hill Road in the world of investing can only be compared to what Wall Street means for the stock markets. Yet, looking at the stretch of understated buildings with nothing but an endless bland landscapes around them, one can wonder why on earth the VCs have decided to be based in the middle of nowhere. A quick glance at the map however, reveals that the area is quite strategically placed between San Francisco, San Jose and the Stanford University – the three pillars of the Silicon Valley’s innovation machine. In its heyday, the entire semi-conductor industry was located within 25km from the richest funds in the world, including Sequoia Capital, Kleiner Perkins, Andreessen Horowitz, Greylock Partners and others.
Venture investing started as a relatively exotic pastime in the 1970s. Industry pioneers like Tom Perkins and Gene Kleiner, who built enterprises such as Fairchild Semiconductor and Hewlett Packard, could see how much capital and expertise it took to get a tech startup of the ground – both the resources they had aplenty. This was a common pattern to how Kleiner Perkins and other funds have started. Since back then none of them could amass enough capital to support a company with a bold idea, VCs had to partner together – the tradition of joint seed rounds remains even today. Thus, being located in the same place, just a short walk from each others’ offices, made a lot of sense.
During the Dot.com boom of the 1990s, VCs became the rockstars of the tech world and often appeared on the covers of popular magazines such as Wired. Fans from all over the world started to make pilgrimages to the Silicon Valley to see the legendary startup offices and garages, even though most of them were nothing more than regular suburban houses. This symbiosis of entrepreneurship and abundant capital bred Apple, Yahoo, Google, Facebook and other companies, whose products we still use. And while today the VC center of gravity is shifting away from the Sand Hill Road and even from the Silicon Valley itself, it has a lot to teach aspiring innovation hubs about building a world-class network of education, capital and startup nodes – starting from a cozy cafe at 3000 Sand Hill.