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Regional Oral History Office University of California The Bancroft Library Berkeley, California William R. Hambrecht EARLY BAY AREA VENTURE CAPITALISTS: SHAPING THE ECONOMIC AND BUSINESS LANDSCAPE Interviews conducted by Sally Smith Hughes in 2010 Copyright © 2011 by The Regents of the University of California ii Since 1954 the Regional Oral History Office has been interviewing leading participants in or well-placed witnesses to major events in the development of Northern California, the West, and the nation. Oral History is a method of collecting historical information through tape-recorded interviews between a narrator with firsthand knowledge of historically significant events and a well-informed interviewer, with the goal of preserving substantive additions to the historical record. The tape recording is transcribed, lightly edited for continuity and clarity, and reviewed by the interviewee. The corrected manuscript is bound with photographs and illustrative materials and placed in The Bancroft Library at the University of California, Berkeley, and in other research collections for scholarly use. Because it is primary material, oral history is not intended to present the final, verified, or complete narrative of events. It is a spoken account, offered by the interviewee in response to questioning, and as such it is reflective, partisan, deeply involved, and irreplaceable. ********************************* All uses of this manuscript are covered by a legal agreement between The Regents of the University of California and William R. Hambrecht dated January 10, 2011. The manuscript is thereby made available for research purposes. All literary rights in the manuscript, including the right to publish, are reserved to The Bancroft Library of the University of California, Berkeley. Excerpts up to 1000 words from this interview may be quoted for publication without seeking permission as long as the use is non-commercial and properly cited. Requests for permission to quote for publication should be addressed to The Bancroft Library, Head of Public Services, Mail Code 6000, University of California, Berkeley, 94720-6000, and should follow instructions available online at http://bancroft.berkeley.edu/ROHO/collections/cite.html It is recommended that this oral history be cited as follows: William R. Hambrecht, “Early Bay Area Venture Capitalists: Shaping the Economic and Business Landscape ,” conducted by Sally Smith Hughes in 2010, Regional Oral History Office, The Bancroft Library, University of California, Berkeley, 2011. iii William Hambrecht, August 2010 Photo courtesy WR Hambrecht & Co. iv Project Overview Early Bay Area Venture Capitalists: Shaping the Business and Industrial Landscape documents through videotaped interview with the first generation of venture capitalists the origins and evolution of venture capital in California. The project explores and explains through the words of participants how venture capital in the state originated in the 1960s and 1970s, its intersection with national legislation and policy, the significance of its location, and its role in creating new companies, new technologies, and new individual and institutional wealth. The Project Venture capital was not a term when these narrators began to practice “risk investment” in the late 1960s and early 1970s. The oral histories describe the evolution of the field into the industry of today, focusing on its earliest emergence in Northern California. The narrators describe their circuitous routes into venture capital, their individual approaches to its practice, illustrative investments in key companies, the significance of its location in the Golden State, and its contributions to creating, financing, and building new companies, nationally and, increasingly, internationally. Conceived and generously funded by Paul “Pete” Bancroft III, the project in its second year has interviewed twelve individuals. In the third and final year, the project scope expands to include interviews with representative investment bankers, attorneys, and early venture-backed entrepreneurs, as well as with additional venture capitalists. Completed oral histories, including those donated by related projects, are available at: http://bancroft.berkeley.edu/ROHO/projects/vc/ An advisory board meets periodically to select individuals for interviews and advise on general direction. Members: Paul Bancroft III, William Bowes Jr., William Draper III, Jerome Engel, Charles Faulhaber, Franklin Pitcher Johnson, and Alan Mendelson. Project Director and Interviewer: Sally Smith Hughes Videographers: Julie Allen, Caroline Crawford, and Linda Norton Transcriber: Katherine Zvanovec v William R. Hambrecht Bill Hambrecht, 74, is Chairman and CEO of WR Hambrecht + Co, a disruptive investment firm headquartered in San Francisco that he founded in January 1998. Bill resigned as Chairman of Hambrecht & Quist in December 1997, the investment banking firm he co-founded with the late George Quist in 1968. Using impartial internet-based auctions that allow the market to determine pricing and allocation, WR Hambrecht + Co is dramatically changing the financial services landscape. With the intent of leveling the playing field for investors in initial public offerings, the firm’s earliest and best- known innovation is OpenIPO®. OpenIPO allows all investors, individuals and institutions, to bid online for shares of an IPO. All investors end up paying the same price; a price determined by the auction. OpenBookSM, an auction for corporate debt offerings, is the second proprietary auction WR Hambrecht + Co has developed. OpenBook is the only system that offers all institutional investors real-time price discovery and open access to all offerings. OpenFollowOnSM is an Internet-based platform for auctioning follow-on offerings to both individual and institutional investors. OpenFollowOn creates a transparent new issue market and offers all bidders equal access. The firm will continue to develop auction products for other capital markets. Besides San Francisco, WR Hambrecht + Co has offices in New York and Philadelphia. Excluding a tour of duty in the military, Bill has been in the investment banking and brokerage business since graduating from Princeton University in 1957. He began his business career in underwriting and sales with Securities Associates, Inc., a securities firm in Winter Park, Florida. In 1961 Securities Associates was acquired by AC Allyn & Co., which eventually became a part of F.I. du Pont & Co. In 1965, Bill managed the San Francisco office for F. I. du Pont, becoming Vice President and Manager of its West Coast Corporate Finance operation in 1967. It was through his corporate finance activities that he met George Quist who was the Head of Small Business Lending at Bank of America. Both men perceived a demand for a strong regional investment bank based in San Francisco that could offer a high level of service to the small, rapidly growing companies in nearby Silicon Valley. During the seventies, the firm built up a unique brokerage and research capability focused on high technology companies that typically traded in the OTC market and were often ignored by the larger brokerage firms. This strategy paid off in the early 1980s when skyrocketing prices from high-tech stocks gave H&Q national prominence as an investment banker and “bulge bracket” underwriter of emerging growth stocks. In the early 1970s Bill became directly involved in the then fledgling venture capital business as a result of H&Q’s investment banking expertise and network of clients. This was an obvious extension of its existing business, since many investment banking clients required both capital and strategic assistance prior to becoming publicly listed. Bill developed this side of H&Q’s business personally, ultimately overseeing the management of over $1 billion invested in close to 700 companies. A few of the companies in the H&Q portfolio, past and present, include Adobe Systems, Advanced Fiber Communications, Apollo Computer, Convergent Technologies, Evans vi & Sutherland, Genentech, People Express Airlines, Read-Rite, Sybase, VLSI Technologies and Xilinx. Bill continues to invest in venture capital and small-cap companies. Bill currently serves as a Director for Motorola Inc., AOL Inc. and is on the Board of Trustees for The American University of Beirut. He also serves on the Advisory Council to The J. David Gladstone Institutes. Bill founded the United Football League, a new professional football league that is in its second year. Bill is also in the wine business. In addition to owning several hundred acres of vineyards in Sonoma County, Hambrecht Wine Group owns C Donatiello Winery in Healdsburg, CA. Bill and his wife, Sally, have been married for almost 50 years. They have five children and nine grandchildren. vii Table of Contents—William R. Hambrecht Interview 1: June 8, 2010 [Audiofile 1] 1 Family roots in Brooklyn and south shore of Long Island—middle class upbringing, interest in athletics, father worked for Standard Oil Company of New York—attending Princeton on a football scholarship, graduation in 1957—family orientation toward business: “I grew up assuming I’d have to work for a living”— six months in the army, decision to go to business school at Wharton—three years in Cape Canaveral, Florida, exposure to early high tech and missile development—move to Chicago, then return to New York, completing some business school coursework at University of Chicago—early computers, Charlie West, understanding the

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