Newsletter 12: The Legacy of Sand Hill Road

I grew up in Menlo Park, California, just over a mile from the heart of the venture capital industry.  Passing the low-lying, set back, non-descript office buildings along Sand Hill Road - which connects the I-280 Freeway to Stanford University’s campus - one could not be faulted for overlooking the 60 years of historical achievements which took place inside those buildings.  For as visually remarkable as the intersection of Wall Street and Broad Street in New York is the first time you set foot there, Sand Hill Road is the opposite: understated and calm.

Driving past those buildings in high school, I would observe the low-lying signs with the names “Kleiner Perkins Caufield & Byers,” “Sequoia Capital,” “US Venture Partners,” “Mayfield Fund,” Draper Fisher Jurvetson,” “Menlo Ventures,” “Battery Ventures,” “Accel,” and “New Enterprise Associates.”  I had a vague notion that behind the modest façade something important was transpiring in those buildings: but only because I had heard stories from a high school friend, whose dad was a partner at one such firm.

Fast forward to today, over 30 years later.  The buildings look exactly the same.  The Stanford Linear Accelerator Center peeks up from where it is imbedded in the hillside, as it did then.  The thousands of acres of beautiful, rolling hills in the distance - all owned by Stanford University - continue to be grazed by free-range cattle today as they have for decades.  Some of the names on those otherwise unexceptional signs have changed, but unless you studied the cars in the parking lots, you probably couldn’t tell if it was the late 1980s or 2024.  And yet, the tranquility of the setting undermines the knowledge that trillions of dollars of value creation occurred there.  In fact, six of the top 10 most successful businesses in the world today, as judged by market capitalization, were funded by firms headquartered on that short stretch of road.

While the various buildings along Sand Hill Road are consistent in their understatement, the philosophies and playbooks employed by the various funds therein differ from firm to firm.  Some firms focus on early-stage startups, while others invest in maturing businesses.  Some firms are hands-on with the companies after making investments, while others are hands-off.  Some funds are concentrated in just a few companies, while others have much broader and more diversified portfolios.  While some only invest in specific sub-industries, other funds are generalists.  Some funds prioritize the business concepts of their portfolio companies, while others are founder-first.  Some even attempt to flip investments relatively quickly, while most have long expected holding periods.  While the historical data shows no one playbook is uniquely successful, these firms all adhere to a disciplined process and are highly committed to their chosen strategy.

As an emerging consumer venture capital fund, Ocampo Capital obviously hopes to follow in the footsteps of those storied venture funds.  At the same time, we expect to remain equally disciplined in following our unique process, strategy, and areas of focus.  Our strategy is expressly to be a “trajectory amplifier”- and by that, we mean to take a hands-on approach to help early-stage consumer businesses scale more quickly and successfully.  The attached image shows how Ocampo Capital compares to some of the legendary venture capital firms on a number of continuums.

Ocampo Capital likes to support 1. excellent leadership teams (in the words of Arthur Rock, the godfather of Sand Hill Road: “Entrepreneurs with managerial magic can’t lose.  If their strategy doesn’t work, they can develop another one”) and 2. businesses with competitive moats.  We also prefer companies that IKEA founder Ingvar Kamprad described with the Swedish term lista (or “doing what you have to do with a minimum of resources”); or by other business innovators on the Indian subcontinent as jugaad (or “non-conventional, frugal innovation”).  Disciplined, efficient execution in our portfolio companies, particularly in the current economic environment, will create a standard that will help them grow through any environment.  Just as we look for this in our portfolio companies, we consistently look for this in ourselves as a venture capital firm.

Sequoia is described as having “manufactured serendipity” through their years of readying themselves for investment.  Accel’s motto is “the prepared mind,” harkening back to the quote from Louis Pasteur and reflecting their years of preparation to make good investments.  At Ocampo Capital, we believe we have a similar perspective, with the past quarter century preparing us for this opportunity to invest now in great consumer companies. 

Sand Hill Road was a cow trail from the Stanford hills back to The Farm 150 years ago, and now it is arguably the most important address in the business world despite its understated look.  I think back on my regular drives along Sand Hill Road as a kid, and use it’s incredible historical trajectory as motivation and inspiration for Ocampo Capital- particularly as we move towards the final close of Ocampo Capital Fund I in early 2025.