My first visit to Sand Hill Road was in the late 90s when I was raising money for my first startup, LayerOne. Sand Hill Road, located in Menlo Park, is the address of choice for venture capital firms. The price per square foot of space is the highest in an area known for sky-high rents – hovering between $110 and $150 per foot. The first venture capital firm to move to Sand Hill Road was Kleiner Perkins Caufield & Byers in 1972, since then companies such as Microsoft, Amazon.com, Facebook, Twitter, Instagram and Skype have raised money from Sand Hill Road investors. In fact, almost every major silicon valley startup has raised money from one or more Sand Hill Road venture capital firms as seen below (from Bloomberg).
My father raised capital from Sand Hill road in the late 90s and early 00s for his companies as did I. Many are predicting the demise of Sand Hill Road as more and more venture capital firms move to downtown Palo Alto and South Park. They suggest that Sand Hill Road is where your ‘father’ raised venture capital. Which in my case is true. The truth is that for a VC the “economies of agglomeration” rule – you want, no, need to be near your peers in the venture capital game.
When I’m in fund raising mode I book a room at the Rosewood Sand Hill (directly across the street from most of the VCs). They have a car service that will drop you off and pick you up from each of your meetings. No where else in the world can you schedule 6 meetings in one day with 6 different venture capital firms. If you head south from the Camino Real on Sand Hill Road the first venture firm you’ll run into is Kholsa Ventures and then Lightspeed Venture Partners, GGV Capital, Shasta Ventures, Accel-KKR, August Capital Management, Mayfield Fund, Greylock Partners, Interwest Partners, Kleiner Perkins, KKR, Sequoia Capital, Makena Capital, Silver Lake, NEA, DFJ, Andreessen Horowitz and Menlo Ventures to name a few.
More and more firms are moving to San Francisco to be closer to the ‘cool kids’, but there is no denying that a visit to Sand Hill Road is a requirement for any startup serious about raising venture capital.