ARD returns were 5% IRR ex DEC from 1946-~1970. Including ARD = near 20% returns. validated the long tail
First 3 vcs. Dga (Draper ghaither Anderson). Draper left for Sutter hill. Greylock. Started off generalist but had to specialize. Venrock Rockefeller family. Venrock rode apple from $500k to $289m in contemporary dollars…in 3 years
JD rockefeller “if you want to succeed, you should strike out on new paths rather than travel the worn paths of accepted success”
Core vc industry growth drivers: LP structure, increasing number of proof points for long tail outcomes (venrock Apple), decreasing capital gains taxation
Arthur rock (people) Tom Perkins (tech) sequoia (markets)
Terman. Head of Stanford engineering. Encouraged docs and post docs to start companies but also come back and teach. Encouraged university and industry relations, uncommon vs east coast schools
“the regions culture encouraged risk and accepted failure”…”there were no boundaries of age, status or social stratum that precluded the possibility of a new beginning”…”it appealed to individuals interested in technology, many of them uninterested in the brutally cold winters and more structured orders associated with the east coast
East coast ARD, Greylock, Venrock. West coast Davis and rock, Sutter hill (forms dga) and angels. Perkins sought to systemize investments in high technology.
Valentine. Yonkers, Fordham. National semi, Fairchild. Capital group sequoia. Market sizing.
Key banks / “four horsemen”: Alex brown (Baltimore), Rothschild (new york), robertson Stephens (SF), hambrecht and quist (sf)