We look at five factors when assessing an investment opportunity: Geography, Stanford, Company Stage, Diversity, and Category. Startups need to meet at least three of the five criteria to be a good fit.
We make most of our investments in and around Silicon Valley. Having said that,we recognize there are other hotbeds of innovation and we have invested in companies located up and down the west coast, in the Northeastern corridor, and occasionally elsewhere in the US. We almost never invest in companies headquartered outside the US.
We have been associated with Stanford for many years, and find the ecosystem creates a rich opportunity set for early stage investments.
Stanford is a unique entrepreneurial ecosystem with 40,000 active companies founded by approximately 220,000 alumni and faculty generating $2.7 trillion in annual revenues in 2017, a staggering number that compares favorably to the sixth largest economy in the world that year according to the World Economic Forum.
Fifteen are well-known public companies with a market capitalization of $1.87 trillion in the midst of a global pandemic (Charles Schwab & Company, Cisco Systems, Dolby Laboratories, eBay, E*Trade, Electronic Arts, Google, Hewlett-Packard Enterprise & Hewlett-Packard Inc, Intuitive Surgical, Netflix, Nike, NVIDIA, Tesla Motors, and Zillow). Silicon Valley has been called a “Stanford spinoff” by former Secretary of State George Schultz.
Silicon Valley startups often cut across traditionally defined sectors, create new categories, or reposition existing categories.
Stanford’s excellence across a wide range of disciplines including top programs in computer science, engineering, medicine, business, law, education, and earth, energy and environmental sciences as well as over 200 interdisciplinary research centers and programs creates many of the best investment opportunities in Silicon Valley.
The vast majority of our investments are “Seed Stage,” which can mean pre-seed, seed, post-seed and even occasionally Series A. Ulu’s typical initial investment is around $750,000, though we have invested both more and less than that average amount.