#Venture capital firms san francisco license#

Sutter Hill set the early tone of the Valley, (discussed below) and acquired the talent of Paul Wythes. In 1965, they merged their ship with Sutter Hill Ventures Johnson started their firm with $150,000 of their family money and $300,000 of Of Germany and Japan under the Marshall Plan, and put Bill in touch with anĪssociate, Fred Anderson, to start a venture firm in 1959. Bill Draper ‘s father was responsible for the economic reconstruction Investment Company in 1962, by William Henry Draper III (a student of Doriot ‘s) and Franklin P. It was later re-formed as the Draper and Johnson Rock was aĪ second notable early West Coast venture capitalĬompany was Draper, Gaither & Anderson (officially the first venture firm Yet Davis and Rock dissolved in 1968, despite a stellar run. Million (after raising $5 million) and returned $100 million to their investors. RockĪlways attributed Intel ‘s success to the scientific talent and the great Rock raised $2.5 million for Gordon and Noyce ‘s team (no venture firm was large enough to fund thatĪmount as a single commitment) and Rock even wrote their business plan. Want to pay the scientists options or give them management control of theĭivision (a big mistake!). Say “Gee, I think maybe Gordon and I do want to leave Fairchild Semiconductor and go intoīecause Fairchild had died, and the bureaucratic new CEO in New Jersey didn’t Rock’sīiggest deal was funding Intel in 1968, after Systems, funded for $280,000 in 1962 and sold for $990 million in 1969.

One early white swan for Rock was Scientific Data Launching Teledyne, Intel, Apple, and many other high-tech companies. After 4 years on red-eye flight, Rock moved toĬalifornia (because of the scientific energy around Stanford, created by Terman ), founded his own firm, and played a key role in Labs a new home at Fairchild Semiconductor, after Sherman Fairchild (an inventorĪnd the largest owner of IBM stock) decided One early deal in 1957 was getting some scientists who left Shockley in New York, who had been flying to California to do technologyĭeals.

Investment company, doing deals on the side. Rock initially began more as an agent than as a principal in an Rock, founded by Arthur Rock and Tommy Davis in 1961 with $5 The first notable firm of the 1960s was Davis and Most of these greybeards, interestingly, had financialīackgrounds and not strong technical backgrounds. (See the secondįour venture capital firms formed in the 1960s are World-class engineering departments, strong commercial track record (HP, Fairchird, Varian, etc.), and a seasoned group ofĮntrepreneurs, smart venture capitalists started moving West. The nucleus of many semiconductor startups in the 1960s. Shrewd institution building by Fred Terman, described in another chapter in this book).Īdditionally, the West Coast was much more a meritocracy, where young engineersĬould lead companies and young bankers could fund them. Weather and the federal funds that boosted the engineering departments at The West Coast took over because of the sunny Before WWII, the northeast dominatedīecause the technical skill was in Boston (MIT) and the capital was there too So why did Silicon Valley take over the leadership ofĪnd history were part of the answer. Lost most of the $2 billion it put into SBIC firms. Point the partnership-based venture firms took off. it made the difference between not beingĪble to do it, not having the money.” Many believe SBICs filled a void from 1958 to the early 1970s, by which Of people like us.” Bill Draper, the first West Coast venture capitalist, has been Investing] was a way to do something… it formed the seed of the idea and a cadre Thought the new law made the US “see that there was a problem and that [venture To early venture firms, and some like Franklin “Pitch” Johnson, profiled below, The booming IPO market proved the model of investing in newĬompanies, as some SBICs cash out at attractive levels. Think the SBIC program did little to advance the art and practice of venture

Subsidized dumb deals, when bankers came to collect.ĭespite these problems, many venture capital pioneers Government guarantees for the debt usually meant taxpayers They could borrow fourĭollars for every one to invest, and many did. (SBICs) to help the financing and management of the small entrepreneurialīusinesses in the United States.

#Venture capital firms san francisco license#

Small BusinessĪdministration (SBA) to license private “Small Business Investment Companies” The launch of the Soviet Sputnik satellite scared the US CongressĮnough to pass the law, which officially allowed the U.S. Venture capital industry was the passage of the Small Business Investment Act One of the first steps toward a professionally-managed The Greybeard Funders: Venture Capital in its Clubby Days (1955-78) Purchase the book These are excerpts from Arun Rao's bookģ. A History of Silicon Valley A History of Silicon Valley Table of Contents