Sterling Payot Company was founded in 1989 by Robert M. Smelick and H. William Jesse. Bob Smelick had just 'retired' from the First Boston Corporation, where he had been the Managing Director, Investment Banking, in San Francisco. Bill Jesse had started a banking firm in the mid-eighties that focused on working with the owners of private companies, mostly family companies. They both saw the opportunity in 1989 to create and handcraft a new investment banking firm that enabled its principals to provide highly professional and highly individualized advice to executives and owners. Both bankers had a long list of clients seeking advice on financial as well as strategic matters.

  A central founding concept for Sterling Payot Company was that investment bankers in the '40s, '50s and '60s had the right formula: strike an equity arrangement with a company and then help the company on financial and strategic matters... external funding, strategic alliances, restructurings, acquisitions, business strategy, board members, etc. Compensation results from a growth in the equity position. A second founding concept was that small firms, such as Sterling Payot Company, could create business and financial analysis equivalent to the largest investment banks and consulting firms... through the use of information technology. A third founding concept was that the analytical work of the firm would never be disconnected from the business and financial experience base of the firm's Principals and Directors.

Joining Bob Smelick and Bill Jesse as Founding Directors of Sterling Payot Company were John Glynn, a Silicon Valley Venture Capitalist with thirty years of investing experience, and Don Guinn, the retired Chief Executive Officer of Pacific Telesis. Jim Gaither, the Managing Partner of the law firm Cooley Godward and former Chairman of the Board of Stanford University, subsequently joined Sterling Payot Company as a Director.

The Principals of Sterling Payot Company have investment banking experience with First Boston, Lehman Brothers, Donaldson Lufkin & Jenrette and Morgan Stanley. The firm's Principals and Directors have been members of the boards of directors of over fifty companies in the United States.