Sutter Hill Ventures, A Venture Capital Firm with a Focus on Building Companies

Sutter Hill Ventures is a venture capital firm that focuses on building companies from the ground up. They invest in early-stage startups with a strong potential for growth.

The firm has a unique approach to investing, taking a hands-on approach to help their portfolio companies succeed. They work closely with founders to provide guidance and support.

Sutter Hill Ventures has a strong track record of success, with many of their portfolio companies going on to achieve significant milestones. They've invested in a wide range of industries, from software to healthcare.

Their investment strategy is focused on identifying talented founders and providing them with the resources they need to build successful companies.

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Sutter Hill Ventures' investment strategy is a refreshing departure from the traditional venture capital approach. They don't have a set fund with a predetermined size, which means they don't have to worry about deploying all the capital within a certain timeframe.

This evergreen fund structure gives them the flexibility to invest in companies at their own pace, without feeling pressured to meet arbitrary deadlines. They care about investing in good companies, and they won't invest in ones that don't meet their standards.

Their structure also helps them avoid the common pitfalls of traditional venture capital firms, such as having to invest large sums of money in a single company or feeling biased towards deploying all the capital quickly.

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Sutter Hill Ventures has a unique structure that sets them apart from other venture firms. They have an evergreen fund, meaning they don't have a set amount of capital to deploy.

This evergreen fund gives them flexibility to invest in companies as they see fit, without being constrained by a specific deadline or fund size.

SHV also has builders in residence, who are founders that work directly with the firm to build companies from scratch.

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They hire operators to help manage and grow these companies.

This structure allows SHV to focus on originating companies and scaling their investments thoughtfully.

Their incentive is to invest in good companies, not just to deploy a large amount of capital.

This approach has led to the creation of 20 companies, with a total market cap of almost $100 billion.

Their rate of origination is increasing, with 10+ companies having SHV in-residence builders as founders.

Here are the key differences between SHV's structure and traditional venture firms:

This unique structure has allowed SHV to build a portfolio of successful companies, and their approach is definitely worth paying attention to.

SHV companies are founded by incredibly well-established and experienced people.

They have a deep network within technical fields, which they tap into when originating new companies.

SHV doesn't go to college campuses to find talent; instead, they look for people with years of experience in large B2B fields.

They source the best-of-the-best, and their founders, like Speiser, are EXTREMELY good at it.

Recruiting and building early teams is one of Speiser's biggest strengths, and he's done it many times.

Doug Mohr, SHV Managing Director, also excels at recruiting for founding teams.

Speiser has an immense network and finds good builders to assemble amazing teams.

In the story of building Pure Storage, Speiser is mentioned 13 times, mostly for his role in recruiting for the founding team.

This approach is a key part of SHV's investment strategy, and it's paid off in a big way.

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Sutter Hill Ventures has a diverse portfolio of companies, with a Tracxn Score of 68 for both Sigma and SiFive, indicating a strong performance in the Enterprise Applications sector. Sigma is an AI-powered reporting and dashboard development platform founded in 2014.

One of the notable companies in Sutter Hill Ventures' portfolio is DataRobot, a provider of an AI and cloud-based data science platform, with a Tracxn Score of 66. DataRobot was founded in 2012 and has achieved significant success in the Enterprise Applications sector.

Sutter Hill Ventures has also invested in Sila Nanotechnologies, a provider of nanotech-based lithium-ion batteries for diversified applications, with a Tracxn Score of 62. Sila Nanotechnologies was founded in 2011 and is a notable player in the High Tech sector.

Here's a list of some of the companies in Sutter Hill Ventures' portfolio, along with their Tracxn Scores and sectors:

Sutter Hill Ventures has also had success with its acquired companies, including Adexa, Smartsheet, Clumio, Infinera, and Lacework.

Sutter Hill Ventures has an uncommon financial structure that allows the firm to invest with a high degree of freedom.

The firm maintains an evergreen fund, which means limited partners can invest money for a cycle that lasts a few years, and the money remains invested during the next cycle unless they opt out.

This structure gives Sutter Hill the flexibility to lead early rounds of funding for its start-ups, as it's not making a whole lot of other bets.

Sutter Hill regularly leads early rounds of funding for its start-ups, because it's not making a whole lot of other bets, said Vik Singh, a former Yahoo architect.

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Let's take a closer look at the unicorns in Sutter Hill Ventures' portfolio. There are at least four unicorns, companies valued at over $1 billion, in their portfolio.

One of the unicorns is Sigma, an AI-powered reporting and dashboard development platform founded in 2014.

Another unicorn is SiFive, a provider of AI-based IP cores for system-on-chips, also founded in 2015.

DataRobot is a third unicorn, providing an AI and cloud-based data science platform since 2012.

Sila Nanotechnologies is the fourth unicorn, offering nanotech-based lithium-ion batteries for diversified applications since 2011.

Here are the unicorns in Sutter Hill Ventures' portfolio, listed in order of their Tracxn Score:

Sutter Hill's financial structure is a game-changer in the venture capital world. The firm has an evergreen fund that allows it to invest in start-ups without a set end date.

This means that limited partners can invest money for a cycle that lasts a few years, and their money remains invested during the next cycle unless they opt out. Sutter Hill decides when to distribute money or company shares to the limited partner.

Sutter Hill regularly leads early rounds of funding for its start-ups because it's not making a whole lot of other bets. This is quite rare for a venture firm, according to Vik Singh, a former Yahoo architect.

In the later stages of a company's life, Sutter Hill is willing to put up serious money right next to deep-pocketed investors. It invests from its evergreen fund, unlike some prominent firms that have growth funds for this purpose.

Sutter Hill Ventures is a California Limited Partnership, specifically a venture capital fund.

It's registered in California, United States, with a Private Fund ID of 805-7813429138.

Sutter Hill Ventures has managed at least one private fund, Sutter Hill Ventures A California Limited Partnership.

The fund manager is Sutter Hill Ventures, with a CRD number of 162959.

Sutter Hill Ventures has a significant stake in its own fund, with management ownership at 31%.

The fund also has a small portion owned by non-US entities, at 16%.

Sutter Hill Ventures takes a highly focused approach to investing, with a significant emphasis on quality over quantity. They only originate 1-2 companies per year, and selectively pick a few other investments.

This selective approach allows them to remain laser-focused on their priorities and current investments, rather than spreading themselves too thin. According to Crunchbase, SHV only did seven deals in 2021, with a total capital of ~$3.1B.

SHV's investment focus is centered around identifying large macroeconomic shifts and solving difficult technical problems. They look for trends that are here to stay, such as the shift to cloud storage, and then identify a current problem that they can solve. The potential market for these solutions must be huge, with the goal of scaling to +$1B in annual revenue.

Here are some of the sectors where SHV invests, along with the number of investments in each:

SHV only originates ~1-2 companies per year, and then they selectively pick a few other investments. This focus allows them to remain laser focused on their priorities & current investments.

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This approach means there is a potential MASSIVE opportunity cost, as SHV has to say no to opportunities. They better be sure the 1-2 they choose are winners.

To put this into perspective, SHV only did seven deals in 2021, with a total capital of ~$3.1B. These deals were huge, with Lacework alone being $1.3B.

Here are the characteristics of SHV's "big bets":

IPOs and public companies in Sutter Hill Ventures' portfolio have been a significant focus area for the firm. One notable example is GRAIL, which went public on June 14, 2024, after the firm first invested in the company on January 10, 2016.

GRAIL's IPO was a major milestone, marking a significant return on investment for Sutter Hill Ventures. The firm first invested $100 million in GRAIL as part of its Series A funding round.

Sutter Hill Ventures has also had success with Astera Labs, which went public on March 20, 2024. The firm first invested in Astera Labs on April 22, 2020, as part of its Series B funding round, contributing $26 million to the company.

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Astera Labs' IPO was a notable achievement, demonstrating the firm's ability to identify and support promising startups. Sutter Hill Ventures has a strong track record of investing in companies that go on to achieve significant growth and success.

Here are some key statistics on Sutter Hill Ventures' IPOs and public companies:

Sutter Hill Ventures has demonstrated its ability to identify and support companies that achieve significant growth and success, as evidenced by its portfolio of public companies.

Sutter Hill Ventures has a diverse investment portfolio across various sectors. They have made a significant number of investments in Enterprise Applications, with 60 deals under their belt.

Their focus on Enterprise Infrastructure is notable, with 30 investments made in this area. This suggests they're interested in supporting companies that provide critical infrastructure for businesses.

High Tech is another sector where they've made a notable presence, with 25 investments. This indicates they're open to exploring new technologies and innovative ideas.

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Life Sciences is a sector where they've made 20 investments, which is a notable commitment to supporting companies in this area. This could be a sign of their interest in healthcare and biotechnology.

FinTech is a sector where they've made 13 investments, which is a smaller but still significant presence. This suggests they're interested in the intersection of finance and technology.

Here's a breakdown of the sectors where Sutter Hill Ventures has made investments:

Sutter Hill Ventures has a clear focus on geographic investment, primarily targeting countries in the Western world.

The United States is their top destination, with a whopping 120 investments made so far.

In contrast, China and the United Kingdom have received only 2 investments each from Sutter Hill Ventures.

New Zealand and South Africa have also been targeted, with 1 investment each in these countries.

Here's a breakdown of Sutter Hill Ventures' geographic investment focus:

Co-investment and partnerships are crucial for Sutter Hill Ventures' success. Over the past 27 years, 699 investors have co-invested in their portfolio companies.

Sutter Hill Ventures often partners with other funds and angels, with 153 investors having invested in rounds before them. In some cases, they even partner with the same investors multiple times, such as Greylock, which has invested in 7 companies alongside Sutter Hill Ventures.

Their top co-investors include a16z, which has partnered with Sutter Hill Ventures in 6 companies. This level of collaboration is a testament to Sutter Hill Ventures' ability to work with others to achieve success.

Here are some key statistics about Sutter Hill Ventures' co-investors and partnerships:

It's worth noting that Sutter Hill Ventures also partners with investors who invest after their initial investment, with 309 investors having invested in their portfolio companies after their initial investment.

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Sutter Hill Ventures has a diverse portfolio of companies across various sectors. The venture firm has invested in 246 companies, with a focus on Enterprise Applications, Enterprise Infrastructure, High Tech, Life Sciences, FinTech, and Others.

Some of the notable sectors where Sutter Hill Ventures has invested include Enterprise Applications, with 60 investments, and High Tech, with 25 investments.

The firm's portfolio includes unicorns such as Sigma, SiFive, and DataRobot, which have received significant funding and have achieved remarkable growth. These companies have demonstrated the potential for innovation and disruption in their respective industries.

Here are some of the notable unicorns in Sutter Hill Ventures' portfolio:

Sutter Hill Ventures has also invested in several companies that have gone public, including GRAIL, Astera Labs, and C3 AI. These companies have successfully completed their IPOs and have listed on the stock exchange.

Here are some of the notable public companies in Sutter Hill Ventures' portfolio:

Additionally, Sutter Hill Ventures has invested in several companies that have been acquired, including Adexa, Smartsheet, and Clumio. These companies have been acquired by other companies, marking significant milestones in their growth and development.

Here are some of the notable acquired companies in Sutter Hill Ventures' portfolio: