Sand Hill Road

Sand Hill Road (SHR) or Sand Hill is an arterial road in western Silicon Valley, California, running through Palo Alto, Menlo Park, and Woodside, notable for its concentration of venture capital firms. The road has become a metonym for that industry; nearly every top Silicon Valley company has been the beneficiary of early funding from firms on Sand Hill Road.

Its significance as a symbol of private equity and venture capitalism in the United States has been compared to that of Wall Street and the stock market.

Location

Connecting El Camino Real and Interstate 280, the road provides easy access to Stanford University and the northwestern area of Silicon Valley. The road also runs southwest of Interstate 280 into a residential neighborhood of Woodside, California, but the private equity companies are concentrated to the east of the freeway on the main stretch of the road in Menlo Park. On its northeast end, it crosses into and runs briefly through Palo Alto before ending at El Camino Real.

Sand Hill Road is also home to the SLAC National Accelerator Laboratory.

History

For many years, Sand Hill Road's northern end terminated in the middle of Stanford Shopping Center's parking lot, and the only four-lane segment was the section from Interstate 280 to Santa Cruz Avenue (the section where all the venture capitalists are housed). This situation resulted in two severe bottlenecks which made it difficult to travel to and from Stanford Shopping Center, Stanford University, and Menlo Park.

Extension and widening of the road were fiercely opposed by environmentalists, who were concerned about the road's proximity to San Francisquito Creek, and by residents of Menlo Park, who feared that completion of the road would increase traffic congestion in their area due to the mid-Peninsula region's lack of a direct north–south arterial. After three decades of lobbying, negotiation, and litigation, the road was finally completed to El Camino Real in 2001. Only the existing portion from just ''north'' of Alameda de las Pulgas to just ''south'' of Stanford Shopping Center was widened to four lanes; the new extension past the shopping center was built only as two lanes.

The bottleneck near Santa Cruz Avenue was widened in 2006 and features a high faux rock wall at the junction of Sand Hill Road and Santa Cruz Avenue. The project was delayed because the stretch of land at issue runs through Menlo Park, not Palo Alto; the city reversed its opposition to widening only after seeing the results of the widening of the northern Palo Alto segment.

Venture capital

In 1972, the firm now known as Kleiner Perkins was the first venture capital firm to open an office on Sand Hill Road. The stellar performance of Kleiner Perkins's first $8 million fund quickly attracted other similar firms to the Menlo Park area, resulting in "the most important cluster of venture capital firms in the world", an author later wrote. Despite this, in the mid-1970s, Kleiner Perkins began to shift operations to Downtown San Francisco, but years later moved back most of its operations to rejoin the many other venture capital firms that had put down roots around its original office location. Since then, beneficiaries of funding from Sand Hill Road have included Microsoft, Amazon.com, Facebook, Twitter, Instagram and Skype.

When Microsoft's Silicon Valley office moved to Sand Hill Road in 1988 it paid US$2.02 per square foot, less than the US$3 average for Palo Alto and Menlo Park. Robert Gaskins wrote, "There could not be a better location for accessibility coupled with privacy and natural beauty", and "appropriate for a top-tier company like Microsoft". For several years during the dot-com boom of the late 1990s, commercial real estate on Sand Hill Road was more expensive than almost anywhere else in the world. The annual rent in the area around Sand Hill Road peaked at around US$144 per square foot ($1550 per m²) in mid-2000; at the time, this was higher than rates in Manhattan and London's West End.Ulfelder, Steve. "Welcome to the Hotel California No Vacancy: It's goodbye Santa Clara and hello Cincinnati for an increasing number of Internet start-ups that would rather not deal with the Valley's insane real estate costs and fickle workforce." ''Network World'', September 25, 2000, p. 100.

In 1997, the Harvard Business School opened the California Research Center at 3000 Sand Hill Road, whose aim is to enable HBS faculty to write business cases about Silicon Valley.

As of December 2014, Sand Hill Road still had the most expensive office space in the United States with annual rent reported at $111 per square foot, which was higher than Manhattan's Fifth Avenue at $102 per square foot.

As of June 2022, Sand Hill Road was still home to the most expensive office space in the United States, with Newmark Group reporting monthly rent at $10.66 per square foot (equivalent to annual rent of $127.92 per square foot), which was reportedly higher than other top-tier markets like Manhattan's Park Avenue and Greenwich, Connecticut. However, prices were under pressure from the shift to remote work during the COVID-19 pandemic, which had reduced the necessity of maintaining a physical headquarters on Sand Hill Road. Other issues included the dated appearance of Sand Hill Road's of "low-rise woody walk-ups, most of them built in the 1970s and ’80s", and their distance from the restaurants and stores of downtown Menlo Park and its Caltrain station. After vacancies on Sand Hill Road peaked at around 15 percent at the end of 2020, landlords responded to these issues by renovating buildings and adding amenities like farm-to-table restaurants to justify their demands for high rent.

Venture capital firms

Venture capital and private equity firms located on Sand Hill Road include:

In popular culture

The season two premiere episode of the HBO television series ''Silicon Valley'', in which the show's protagonists try to secure venture capital for their startup, was titled "Sand Hill Shuffle".

In the second episode of HBO miniseries '' The Dropout'', Elizabeth Holmes visits several venture capital firms on Sand Hill Road in the hopes of securing investment for Theranos.

In the 2010 film '' Birdemic: Shock and Terror'', protagonist Rod visits a VC firm on Sand Hill Road to get financing for his solar energy startup.

References

External links

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{{Menlo Park, California

Streets in Santa Clara County, California
Menlo Park, California
Silicon Valley
Streets in San Mateo County, California