Photo: All Things D
The U.S. capital markets are the most developed, efficient, and comprehensive in the world.What makes them so amazing is not our public stock and bond markets–many countries have those. What makes the U.S. different is the depth and breadth of our private capital markets.
In the U.S. over the past half-century, our private capital markets have evolved from a group of renegade individuals and bankers to a multi-trillion dollar institutionalized “risk capital” business that almost every major pension fund and institutional investor has allocated money to.
And the crown jewel of that system, which for the past five decades has helped make the U.S. economy the most innovative and dynamic in the world, is the venture capital business.
Venture capital firms are spread out across the world, of course, but as with other industries, there’s a physical place that represents the global geographic centre of the business: California’s Silicon Valley.
And within that centre, there’s an epicentre: A winding strip of pavement leading west from Palo Alto into the hills known as “Sand Hill Road.”
And, within that epicentre, there’s an epi-epicentre: A specific address on Sand Hill that features a greater concentration of VC rockstars than any other address in the world.
If you’re ever looking for money to build a technology company, you’ll probably visit this place.
And you might be wondering what it will look like.
Well, we just went there.
And we took some pictures.
So now you’ll know!
The most interesting and engaging part of VC-world, of course, is what goes on in the buildings, but we regret to say that, on our trip, that was off the record.
And although we have subtitled this tour “A Savage Journey…” in honour of the late Hunter S. Thompson’s “Fear and Loathing in Las Vegas,” we regret to say that our business there prevented us from consuming vast amounts of hallucinogenics, narcotics, and booze before we went. So it wasn’t actually that savage.
But in any event…
We'll start on the sidewalk in pleasant, perfect Palo Alto, in the heart of Silicon Valley. It's always 70-degrees and sunny in Palo Alto, it seems. And everyone looks healthy and is in a good mood.
Right there on College Avenue, a mile or so from Stanford University, right next door to Lululemon, is the first stop on our VC-world tour...
...What appears to be a whole building devoted to Accel Partners. Accel Partners! The ones who bought a huge stake in Facebook for pennies, along with dozens of legendary investments! No wonder they can afford a whole building.
Head upstairs and smile and they might give you a bag of Angry Birds (which they've also invested in).
But, truth be told, Palo Alto itself is not the epicentre of VC-world. The epicentre of VC-world is across the railroad tracks, up in the hills, a couple of miles west of Palo Alto toward the Pacific. And, conveniently located on the way, there's a Nordstrom. You can stop there if you haven't already acquired your Silicon Valley tech-and-VC uniform: Khakis and an oxford shirt.
You'll be closing in on the epicentre of VC-world when you reach the top of huge hill, at a busy intersection on Sand Hill. When you get up there, don't forget to take a peek in the rear-view mirror. Those orange hills in the distance are the mountains south of Oakland, across San Francisco Bay.
If you see the sign for I-280, you've gone too far. The entrance to the epicentre of VC-world is just behind you.
When you see this brick wall on the right, you'll know you're getting close. See that famous name in the middle? Draper Fisher Jurvetson!
Go ahead and drive around the Sierra and Battery parking lot, soaking up the ambiance. Smell the eucalyptus trees. You're almost to the epicentre of VC world.
And then get ready. Because this little drive, just a little way further down Sand Hill, leads to the ABSOLUTE epicentre OF VC-WORLD!
3000 Sand Hill Road isn't a BUILDING, mind you. It's a complex. There's a clock tower in the middle. And a restaurant...
And there you are. The main parking lot at 3000 Sand Hill Road. Breathe deep. Take a look around. It's the epicentre of VC world!
Inside these boring buildings, all a stone's throw away, is maybe $100 billion of investment capital. Play your cards right, and you might get some!
Buildings One, Two, and Four are equally impressive. So you get the picture. But now it's time to let you in on a little industry secret. It's actually possible that the epicentre of VC-world has begun to move in recent years. Where? Across the street.
You see, across the street, tucked behind a new super-high-end luxury hotel ($700 a night) that the cool kids schmooze and stay at, is a newer office complex. The buildings at 2855 Sand Hill Road are less boring than the ones at 3000. They include different shades of brown. And they're WAY more expensive to rent space in....
And let's take a look-see at who we have here... New Enterprise Associates! Seligman. And, wait--WHOA--Andreessen Horowitz!!! See what we mean about the epicentre of VC-world maybe shifting over here?
First observation? This place is WAY nicer and WAY less boring than 3000 Sand Hill Road. There are fountains, for example.
There's even a sneaky view of the hills (on the other side of the freeway). That's probably the reason for those fountains, by the way. White noise. (And it works!)
There's also a crap-load of space in these buildings, in case you're looking and can afford to pay higher-than-Manhattan rents.
And do you know what THAT is? That's the door to Andreessen Horowitz!! Marc Andreessen might be in there!
The bar's full, of course. And, wait, is that...is that?? Nope. It's not Ron Conway, though everyone says he's often here. Maybe Ron's in the bathroom.
So that's it--the centre of VC world. That's where the money is. And now you know the truth: It's colossally boring looking. In fact, it's hard to believe that so much power and disruption and innovation emanates from such a boring-looking place. But in any event, say the right things while you're there, and maybe you'll go home with some. And hang out around there long enough, and meet enough folks, and maybe eventually you'll get invited to someone's private 3D theatre for a movie. After all, this is Silicon Valley. Why bother with a cineplex when you can just build one in your house? In fact, if your visit to VC world helps your company really kick arse, YOU can just go ahead and build one!
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.