What Sam’s Grill, the VC lunch spot of the 1950s, can tell us about today

I’m writing this from booth number nine—swaddled between three dark wood walls and a thick Greek key-patterned curtain—at Sam’s Grill in downtown San Francisco.

These aren’t your classic red American diner booths or shadowed confessional booths. Tucked away in a train car hall, with a handy black buzzer to summon the waiter, the booths feel secluded.

I’m here, in my booth number nine, with a ceiling view of a John James Audubon-style painting of soaring ducks, for a taste of VC history. In 1957, this restaurant was the West Coast venture capital hotspot.

Or the closest thing to. In the late 50s and 60s, venture capital was still called adventure capital and a check for $80,000 or $100,000 was a lot of money for a fledgling entrepreneur—and in Sam’s booths, IVP founder Reid Dennis convened a small group of like-minded investors to hear entrepreneurs’ pitches. It was an early version of the lunch pitch meetings I’ve heard about hundreds of times. (Dennis passed away earlier this year, but leaves a legacy: IVP recently raised its $1.6 billion eighteenth fund .)

There have been a number of VC "hotspots" over the years. The Creamery during the Web 2.0 days in the SoMa neighborhood of San Francisco, of course. And Buck’s, in Woodside, during the dotcom days.

Sam’s belongs to its own moment. In his 2022 book The Power Law, author Sebastian Mallaby writes that the booths were a key part of Sam’s appeal for those early adventure capitalists. They "permitted the illusion of privacy" in a financial district restaurant where the "sole was dependable and the sourdough was fresh," Mallaby wrote.

IVP’s Dennis sometimes talked about the lunch clubs as a microcosm of how much VC has changed, Steve Harrick, a general partner at the firm, told me as I ripped my sourdough.

"When he’d talk about it, he would shake his head about how competitive the industry has become," said Harrick. "He’d use these stories to say: 'We used to collaborate on everything. There just weren’t very many of us, there wasn’t that much capital to go around, and there were only so many financeable alternative options each year. So, I showed them my deals and they showed me theirs. And the biggest thing in all of it was honesty—your word really mattered. If you said you were in, you were in.’"

In the 50s and 60s, venture capital was far from mainstream, with entrepreneurs and VCs alike donning coats and ties to convey respectability, a stark contrast to Patagonia vests and hoodies. But whether it was ties or vests, the goal was the same: to build trust.

"What’s so important in this industry is that you have to decide whether you trust somebody when you’re going into business with them," said Harrick. "Would you rather do it like this, or would you rather use a Zoom screen?"

To Harrick’s point, I’m unsure if I buy Mallaby’s assertion that it was exclusively the privacy mirage that made the booths appealing to Dennis. I wonder instead if it was the focus. In restaurants, there’s almost always minor ruckus, but hunkered between the wood walls, you can really listen to somebody, really see them. And if it’s true that venture is ultimately a people business, listening can make all the difference. In VC, what you don’t know can hurt you. And today the stakes are higher and the checks are bigger, which makes that truer than ever.

Harrick and I spent a lot of time talking about what's changed in VC, from the scale and competitiveness of the space to the improved flow of information to the wide-ranging teams that now support firms and founders. The magnitude of potential returns has also grown exponentially—early VC Arthur Rock’s original returns were in the tens of millions, and now (at least if you’re at that growth stage like IVP) that can be one check.

"How we do due diligence, the flow of information, the magnitude of the potential, that all has changed," said Harrick. "But the basic element of giving capital to a money-losing business with an executive I believe in, because I think they can create something great? That’s exactly the same."

After Harrick left, I puttered about in Sam’s, watching as the fifth-oldest restaurant in the U.S. transitioned into evening. The wine, fries, and clam chowder started flowing. Sam’s owner, Peter Quartaroli, was around tending bar, and I corralled him into my booth number nine. I asked him if he knew that OG VCs used to come here. Quartaroli laughed: "They still do!"

Quartaroli saved Sam’s from demolition about a decade ago. An IMDb-real actor in his other life, Quartaroli showed me how to ring the bells in the booths, and enthusiastically brought me to a chair monogrammed for former San Francisco mayor Willie Brown. (At 90, Brown remains a Sam's regular.) I don't think restaurants and VC have much in common, but if I take both Harrick and Quartaroli at their word, there is perhaps one thing—that both can only exist as they are with human connection, flawed but luminous.

At one point, Harrick asked me what I thought this story was about, and lacking a good answer, I half-launched into a tight ten about Petrale sole. But he met my snark with disarming earnestness.

"Well, it is about soul, a little bit," Harrick said.

I later asked Quartaroli if he thinks restaurants like Sam’s—which opened in 1867, less than 20 years after California became a state—have their own souls. Quartaroli flashed his IMDb smile: "Definitely."

And if someday there’s a technologist who makes those booth wood walls talk, I’d love to listen.

On hotspots… My editor tells me that VC hotspots evolve by era. Shoot me an email: What’s today’s VC lunch hotspot?

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com