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Published on 09/29/1999 All articles from this issue

Voice of the Past

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Venture capital deals in '60s made downtown at Mac's

on Main Street

Morton MacLeod moved to Los Altos in 1957. Not long after that he became one of the first venture capitalists in Silicon Valley. He was interviewed by Amy Lee in 1998 at History House Museum in Los Altos.

I started my own law practice in 1957, when Los Altos was a sleepy town. Most of the big-time legal work, the corporate work, went to San Francisco. Our firm, MacLeod, Fuller, Muir & Godwin, was here at 175 San Antonio Road. I was the attorney for the Village Association and the Real Estate Board. I also enjoyed architectural restoration projects. It makes a person a lot more observant than the average guy.

I did some of the restoration work myself. Once I was varnishing a floor in the office and a man came to the doorway. I yelled at him, "Don't walk on that floor! It's wet!" He was so surprised. He meekly replied, "I'm your 11 o'clock appointment." That was a funny thing. In the early days, I wore many hats.

In about 1963, this Valley was really starting to change its spots. That's when I became a sort of business passageway for some of the start-up technology companies. You know, it was, "I've got all this restricted stock that's not registered. We're in a garage somewhere. I have a big mortgage payment. My wife is going to leave me if I don't get some income."

I'm a very conservative type of lawyer. I wouldn't know a business deal if it bit me in the you-know-what. But our practice was always entrepreneurial and open to new ideas.

Since all this stock people had wasn't public stock, its value was a question, it was a risk. I might have an investor say, "I'll give them $50,000 against that stock, and I want an option on 25 percent of it." That way, if the company became successful, the investor had the right to buy 25 percent of the share holdings at "today's" price. Then this guy would say, "No. The stock is worth a lot more." Or "I really need the money, so I'll take the deal." Or "I think 25 percent is too much, we're going to go public in two years." They would negotiate it. I would put the investor and the new company together. Sometimes we would adjourn to Mac's Tea Room (now called Mac's American Grill, on Main Street). A lot of chitchat and rumors about venture capital deals happened at Mac's.

Eventually the office space in Los Altos was too small, and the venture capital companies moved out to Sand Hill Road (in Palo Alto), and the big San Francisco law firms came down to Palo Alto. It was big time. I've seen some real action in this sleepy town. It's been an exciting time, and it's amazing to me that 2000 is right around the proverbial corner.

- Adapted by Donna Shoemaker, Los Altos Historical Museum

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