Sutter Hill Ventures

Sutter Hill Ventures (SHV) is a venture capital firm based in Palo Alto, California, founded in 1962 by Bill Draper and Paul Wythes. It is one of the oldest venture capital firms in Silicon Valley, known for investing in technology-based start-ups. Over its decades of operation, SHV has financed companies like NVIDIA, Pure Storage, and Snowflake Computing, helping entrepreneurs build successful market-leading companies.

The firm focuses on investments in sectors such as networking, computer technology, business services, financial services, healthcare, and web development. In recent years, SHV has been associated with building companies valued at over $100 billion. One of their notable investments includes Snowflake, which had a record-setting IPO in 2020. Other companies backed by SHV include Restoration Robotics, Pure Storage, Molecular Templates, and Corcept Therapeutics.

SHV also runs the Codepoint Fellowship, a programme designed for recent computer science graduates. It provides the opportunity to work with their portfolio companies and gain technical training, mentorship, and equity in pre-IPO start-ups. Fellows rotate through companies such as Observe, Sigma, Augment, and other firms.

SHV has a track record of being an early investor in companies like LSI Logic and Banyan Systems, and it has continued to incubate and invest in high-growth technology ventures. SHV's portfolio spans 153 companies, with 57% having been acquired and 12% going public. The firm has been involved in over 700 funding rounds, raising more than $31 billion in total funding.

Sutter Hill Ventures (SHV) is a prominent venture capital firm established in 1962. It is based in Palo Alto, California, not Menlo Park as sometimes mentioned. The firm was co-founded by Paul Wythes and Bill Draper, making it one of the oldest venture capital firms in Silicon Valley. Initially, SHV focused on technology and defence-related investments, using the co-founders' connections with the US Department of Defense. Early investments included Amdahl Corporation, a company known for its mainframe computers, and Diablo Systems, a pioneer in daisy-wheel printers.

During the 1970s, SHV shifted its focus towards emerging technology sectors. The firm made strategic investments in companies such as Atari, a leader in video games, and Scientific Micro Systems, a high-performance computer systems manufacturer. It also invested in Apple and Intel during their initial public offerings, demonstrating its foresight in identifying groundbreaking technology companies.

The 1980s saw SHV continue to support innovative technology companies, including LSI Logic, a semiconductor company, and Symantec, known for its antivirus software. SHV's investments during this period played a critical role in supporting companies that became leaders in their fields. The firm also supported the growth of Sun Microsystems and Oracle, both of which became dominant players in the software and hardware industries.

In the 1990s, SHV diversified its portfolio beyond technology. The firm invested in Genentech, a pioneering biotechnology company, and Starbucks, a global coffee retailer. Despite this diversification, SHV remained committed to technology investments, participating in the initial public offerings of eBay and NetApp, both of which achieved significant success.

The 2000s marked a renewed focus on technology and internet-based companies. SHV was an early investor in Salesforce.com, which became a leader in cloud-based customer relationship management (CRM) software. The firm also backed Pure Storage, a provider of flash-based data storage solutions, and invested in Google and LinkedIn, both of which became industry giants.

In the 2010s, SHV further strengthened its position in the technology sector by investing in innovative companies like Snowflake, a cloud data warehousing company, and Sumo Logic, a cloud-based log management and analytics software provider. Snowflake's 2020 initial public offering was particularly notable, as it became one of the largest technology IPOs in history.

SHV's approach is centred on working closely with technical founders to solve complex problems in science and engineering. It has a unique model of incubating companies, often creating them from the ground up with in-house expertise and resources. This model has been highly successful, particularly in the last decade, with SHV creating sixteen companies valued at over $100 billion.

In recent years, SHV has launched initiatives like the Codepoint Fellowship, aimed at mentoring and developing the next generation of technology leaders. This programme offers computer science graduates the opportunity to work in SHV's portfolio companies, gaining technical training, mentorship, and equity in promising start-ups.

By 2024, SHV's portfolio includes over 153 companies, with more than half being acquired and a significant number going public. With a team of experienced leaders, including Managing Directors like Mike Speiser and Stefan Dyckerhoff, SHV continues to be a key player in the venture capital industry, supporting start-ups that drive innovation and technological advancement.

Sutter Hill Ventures has a rigorous investment process, and it carefully evaluates potential investment opportunities before making a decision. Sutter Hill Ventures has a set of investment criteria that it uses to identify promising startups and determine whether they are a good fit for its portfolio.

• Strong Founding Team: Sutter Hill Ventures places a high value on the founding team of a startup. The firm looks for entrepreneurs with a track record of success, deep industry knowledge, and a strong vision for their company. The founding team should also have the skills and experience necessary to execute on their vision and take their company to the next level.
• Large Market Opportunity: Sutter Hill Ventures looks for startups that are targeting a large and growing market opportunity. The firm wants to see evidence that there is significant demand for the product or service that the startup is offering and that the market has the potential to support a large and successful company.
• Differentiated Product or Service: Sutter Hill Ventures looks for startups that are developing a product or service that is differentiated from what is currently available in the market. The firm wants to see evidence that the startup has a unique approach to solving a problem or meeting a need that sets it apart from competitors.
• Scalable Business Model: Sutter Hill Ventures looks for startups that have a scalable business model. The firm wants to see evidence that the startup can grow quickly and efficiently without incurring significant costs. The business model should be able to support large-scale growth and should be adaptable to changing market conditions.
• Strong Financials: Sutter Hill Ventures looks for startups that have a clear path to profitability and strong financials. The firm wants to see evidence that the startup has a solid understanding of its business model and can generate significant revenue and cash flow. The startup should also have a plan for managing its expenses and achieving profitability in the long term.
• Potential for Value Creation: Sutter Hill Ventures looks for startups that have the potential to create significant value for its investors. The firm wants to see evidence that the startup has a strong competitive advantage, a clear path to growth and profitability, and the potential to disrupt existing markets or create new ones.

Sutter Hill Ventures (SHV) operates on a strong set of values that guide its actions and decision-making. These values are essential to the firm’s approach to supporting entrepreneurs and building successful companies.

• Integrity: SHV prioritises ethical conduct in all its activities. The firm believes in doing what is right, even when it is challenging or unpopular. It follows a strict code of ethics and expects its portfolio companies to adhere to the same high standards. This commitment to integrity ensures trust and transparency in its relationships with founders, investors, and business partners.
• Entrepreneurship: Founded by entrepreneurs, SHV has a deep respect for the entrepreneurial spirit. The firm actively seeks out founders who are passionate, innovative, and willing to take calculated risks to build transformative companies. SHV values creativity and supports entrepreneurs in bringing their visions to life by providing not only financial resources but also mentorship and strategic guidance.
• Partnership: SHV believes in building strong partnerships with its portfolio companies. The firm takes an active role in helping founders develop business strategies, recruit top talent, and navigate various challenges. SHV’s approach is to collaborate closely with its portfolio companies, acting as a trusted partner throughout their growth journey.
• Excellence: SHV strives for excellence in all aspects of its work. The firm is committed to identifying the best investment opportunities, hiring talented team members, and setting high-performance standards for itself and its portfolio companies. This pursuit of excellence has enabled SHV to consistently support and develop market-leading businesses.
• Diversity: SHV values diversity, equity, and inclusion, recognising that diverse perspectives contribute to better decision-making and innovation. The firm actively seeks opportunities to invest in underrepresented founders and promotes a diverse workplace culture within its own organisation and across its portfolio companies.

"To partner with exceptional entrepreneurs to build disruptive, market-leading technology companies."

This mission statement reflects Sutter Hill Ventures' focus on identifying and partnering with the best and brightest entrepreneurs in the technology industry. The firm is committed to helping these entrepreneurs build companies that have the potential to disrupt existing markets and create new ones.

The mission statement also highlights Sutter Hill Ventures' commitment to building market-leading technology companies. The firm is focused on identifying startups that have the potential to become industry leaders and providing the support and resources necessary to help them achieve that goal.

Finally, the mission statement reflects Sutter Hill Ventures' commitment to partnership. The firm sees itself as a partner to its portfolio companies, working closely with them to help them achieve their goals and overcome any challenges they may face along the way.

The firm has a diverse portfolio of companies across a range of industries, including software, healthcare, and consumer technology. Here are some examples of companies in Sutter Hill Ventures' portfolio:

• Snowflake: Snowflake is a cloud-based data warehousing company that allows customers to store, analyze, and share data across multiple platforms. Sutter Hill Ventures was an early investor in Snowflake, and the company went public in 2020.
• Sumo Logic: Sumo Logic is a cloud-based log management and analytics platform that helps customers analyze and manage their data in real time. Sutter Hill Ventures was an early investor in Sumo Logic, and the company went public in 2020.
• Sight Sciences: Sight Sciences is a medical device company that develops and commercializes innovative solutions for glaucoma and dry eye disease. Sutter Hill Ventures led a funding round for Sight Sciences in 2017.
• PagerDuty: PagerDuty is a cloud-based platform that helps businesses manage their IT operations and respond to incidents in real-time. Sutter Hill Ventures was an early investor in PagerDuty, and the company went public in 2019.
• NetBrain: NetBrain is a network automation platform that helps businesses automate their network documentation, troubleshooting, and change management processes. Sutter Hill Ventures led a funding round for NetBrain in 2018.
• Feedzai: Feedzai is a machine-learning platform that helps businesses detect and prevent fraud in real-time. Sutter Hill Ventures led a funding round for Feedzai in 2019.
• Bill.com: Bill.com is a cloud-based platform that helps businesses automate their accounts payable and accounts receivable processes. Sutter Hill Ventures was an early investor in Bill.com, and the company went public in 2019.