America's magnet for technology Part 2 of our silicon valley account series Think of the most highly innovative companies of the past 50 years, resembling intel, apple company company, google and bing, twitter.Each company has a silicon valley address and each one got backing from funding your company.In the last decade, more than 35 percent of the nation's capital raising has gone to silicon valley startups. Without delay, when tech founders go looking for money, they could easily end up on higher educatoin institutions avenue in downtown palo alto, calif, with its clean brick pathways and high end boutiques. Among the funding your company with an office on university avenue is bill reichert. "Within five blocks you'll probably find between 30 and 40 venture capital firms, he admits that. "And you'll probably find also about 30 or 40 different startup companies that have been funded by venture capital firms, Reichert co founded garage system ventures.One of his firm's best money was the streaming music service pandora. On some day in his third floor offices, reichert is finding sell at a discount another winner.It's a silicon area ritual:Passionate young sellers visit him every day, looking for financial resources. As we speak, he gets a visit from va klausmeier.She arrives in a casual suit with her lapTop and powerpoint visualization ready To go.This is her third time face-To-Face with reichert, and she is seeking more than $1 million to help the next phase of her clean diesel fuel project. Reichert grills klausmeier about the size of the marketplace for her product, which she promises to sell to refineries.He wants to make certain that he should invest in her company. "We see lots of brilliant items"Reichert tells me,"Any one of which could be economically exciting but we're looking to pick people who are the most successful, If reichert picks smart, they can win big.He could retrieve returns 20 times over for himself and his investors.Perhaps he can find the next facebook, search engines or apple. Though these types of meetings are Pandora Flowers Charms commonplace in silicon valley today, it used to be harder for entrepreneurs like klausmeier to find financial resources.Because just many years ago, there were no vc's in silicon valley. Take a company like horsepower.In about 1938, bill hewlett and david packard used the bootstrap solution to start their company.They began fiddling in a garage, supported by $500 and a used drill press.It took years to build their business. The other method back then was to know the precise people.Martin kenney, a expansion capital historian who is a professor at the university of california, davis, says that when they were setting up, industrialists like henry ford and andrew carnegie asked friends and business contacts for cash. "You would go to that person and maybe have your own business plan, but often not have your business proposal, and detail your idea, he tells. "And if you were properly socially connected that was very important that each might put some money in your young firm, Betting on technology Based on stanford archivist and silicon valley historian leslie berlin, the big alteration of funding for tech startups or"Relating high tech brains with money"Took root in 1959 in your community now known as silicon valley. Berlin says that in the past, business people were becoming keen on electronics. "They didn't experience how it worked.They did not know what it did, berlin speaks.Still,"They think it is going to be big, Before the, the area had the origins of a tech sector.Bill shockley, who co devised the transistor, had his lab what follows.Stanford college opened its industrial park, where the likes of lockheed, general electric and horsepower established facilities. The nascent tech sector drew the attention of three men who would open the area's first capital raising firm with the intent of investing in technology. Two of the men were bill draper and frederick anderson, both retired battle ii generals.The third was former ford footing president rowan gaither. Though there had been some early growth capital activity on the east coast, the build these men set up was new.And berlin says that it is widely seen as the precursor to today's business capital firms. Here's how their plan was successful:The funding your company vcs would go out and find new companies.Then they would match investors with these businesses.The vcs got a cut of any earnings, and key to the arrangement the investors could not be held liable for any legal issues at the startup. Not unsimilar to that of 'finding a gold mine' Draper, gaither anderson got $6 million worth of money spent, berlin informs me, and had for a place to put it.The work to invest money sounds comical today. "Individuals who worked at draper, gaither, anderson would describe driving around to little makers and saying basically, 'do you need any cash? --"Berlin reveals. "And they had trouble finding anybody to take it, that sounded so shady, Berlin says many people at the startup firms reacted by thinking,"Wait a second these consumers want to just give me money?For precisely, At long last, draper, gaither anderson didn't make it happen well.And it was a different silicon valley firm that showed how capital raising investments could pay off.One of its entrepreneurs was arthur rock.