Venture Capital Overview Thomas Williford May 2019 Key Observations 1. Venture Capital funding is increasing, but concentrating into fewer deals. Key Observations 2. Traditional and corporate VC firms are placing more funding into seed and Series A deals. Key Observations 3. The top 20 Venture Capital firms produce the highest returns and secure the best deals. VC Firm Ranking Criteria Returns to Investors Longevity of Firm Impact on Society - Total Assets Managed - How many funds has - Have the investments the firm raised? changed the world? - Number of exits (acquisitions or IPOs) - Has the firm retained - Has the firm impacted its best investors? the VC industry? - Pedigree of partners and investors. - Pedigree of the firm’s - Does the firm have a reputation. vision beyond generating returns? Honorable Mentions - VC Firms Kleiner Perkins - Dominant in the past, but slipped considerably in recent years. NEA - The counterculture to most VCs, yet the largest VC firm in America. General Catalyst - Great recent performance. Most upward potential. Y Combinator - An excellent hybrid between an accelerator and a VC firm. Softbank - $100 Billion Vision Fund enables huge investments in emerging tech. Top 5 Venture Capital Firms 5 4 3 2 1 Greylock Benchmark Founders Fund Andreessen-Horowitz Sequoia 5 - Greylock Notable Partners: Reid Hoffman, Bill Helman Current Portfolio Highlights: Coinbase, Roblox, Coda Exits: Instagram, Redhat, Pandora Ranking Analysis - Greylock Total Assets Managed How many Funds has the Firm Raised: Firm’s Investment Impacts on World (1-10): 3.1 Billion 14 8 Exits to date: Has the firm retained its best investors: Firm’s Impact on VC Industry (1-10): 192 Somewhat 6 Pedigree of Partners (1-10): Pedigree of the Firm’s Reputation (1-10): Firm’s Vision beyond Returns (1-10): 7 - Losing talent recently 8.5 - Founded 1965 6 4 - Benchmark Notable Partners: Bill Gurley, Peter Fenton Current Portfolio Highlights: Zillow, Tinder, Nextdoor Exits from Seed/Series A Investments: Ebay, Uber, Snapchat Ranking Analysis - Benchmark Total Assets Managed How Many Funds has The Firm Raised: Firm’s investment impacts on world (1-10): 2.9 Billion 13 7.5 - Ebay Exited Companies: Has the Firm Retained its Best Investors: Firm’s Impact on VC Industry (1-10): 151 Yes 6 Pedigree of Partners (1-10): Pedigree of the Firm’s Reputation (1-10): Vision beyond Generating Returns (1-10): 7 8 - Founded 1995 9 - Open source, no “CEO” 3 - Founders Fund Notable Partners: Peter Thiel, Brian Singerman Current Portfolio Highlights: SpaceX, Anduril, Oscar Exits: Facebook, Zynga, Spotify Ranking Analysis - Founders Fund Total Assets Managed How many Funds has the Firm Raised: Firm’s Investment Impacts on World (1-10): 3.4 Billion 6 7 Exited Companies: Has the Firm Retained Its Best Investors: Firm’s Impact on VC Industry (1-10): 75 Somewhat 7 - Emphasis on innovation. Pedigree of Partners (1-10): Pedigree of the Firm’s Reputation (1-10): Firm’s Vision beyond Returns (1-10): 9 - PayPal, Palantir 8 - Founded in 2005 9.5 - Equip founders for “Zero to One” 2- Andreessen Horowitz Notable Partners: Marc Andreessen, Ben Horowitz Current Portfolio Highlights: Lime, Illumio, Coinbase Exits: Github, Dollar Shave Club, Pinterest Ranking Analysis - Andreessen Horowitz Total Assets Managed: How Many Funds has the Firm Raised: Firm’s Investment Impacts on World (1-10): 9.4 Billion 13 7 Exited Companies: Has the Firm Retained its Best Investors: Firm’s Impact on VC Industry (1-10): 108 Yes 9 - Registering firm as fin. Advisors Pedigree of Partners (1-10): Pedigree of the Firm’s Reputation (1-10): Firm’s Vision beyond Returns (1-10): 9 - Founded NetScape, 9 - founded 2009 7 - Software is Eating the World OpsWare 1 - Sequoia: Notable Partners: Michael Moritz, Alfred Lin, Neil Shen Current Portfolio Highlights: DoorDash, Verkada, Bird Exits: Apple, Oracle, DropBox Ranking Analysis - Sequoia Total Assets Managed: How Many Funds has the Firm Raised: Firm’s Investment Impact on World (1-10): 15.3 Billion 22 different categories 10 - Led Apple, Sequoia China Exited Companies: Retention of Best Investors: Firm’s Impact on VC Industry (1-10): Yes 9.5 - Best VC model for decades 248 Pedigree of Partners (1-10): Pedigree of Firm’s Reputation (1-10): Firm’s Vision beyond Returns (1-10): 9 10 - Founded in 1972 9 - Empowering Apple, Google VC Investor Ranking Criteria Impact on Startups History of Investment Impact on VC - Has this investor’s - Has the investor backed - Has the investor had a guidance as a board profitable ventures significant impact at a firm? member helped startups consistently? succeed? - Does the investor back - Has the investor changed the - Has this investor profitable ventures early? thought framework for how founded any successful VC investments are startups? conducted? - Honorable Mentions - VC Investors Reid Hoffman - Greylock Ron Conway - SV Angel Bill Gurley - Benchmark Elad Gil - Angel Investor Neil Shen - Sequoia China Alfred Lin - Sequoia Fred Wilson - AVC Peter Levine - Andreessen Horowitz Top 5 Venture Capital Investors 5 4 3 2 1 Peter Fenton Michael Moritz Mary Meeker Peter Thiel Marc Andreessen 5 - Peter Fenton Benchmark Current Portfolio Companies - Docker, Buoyant, TimescaleDB Exits - Twitter, Yelp, Elastic Quote - “The best time to invest is right before the company’s rising ‘adoption curve’ meets the declining risk curve.” Ranking Analysis - Peter Fenton Has this investor’s guidance as a Has the investor backed Has the investor had a significant board member helped startups profitable ventures consistently? impact at a firm? succeed? (1-10): (1-10): 9 - Seven years at Accel, best 7 - Twitter @ 25 employees, 9.5 - on Midas List of Top 100 current Benchmark investor Yelp investors since 2007 Has this investor founded any Does the investor back Has the investor changed the successful startups? (1-10): profitable ventures early? thought framework for how VC 1 - None founded himself. (1-10): investments are conducted? 8 - Well known for backing Yes - Back companies early to companies early achieve large gains 4 -Michael Moritz Sequoia Capital Current Portfolio Companies - Stripe, Instacart, Klarna Exits - Google, Yahoo, LinkedIn Quote - “There's nothing more invigorating than being deeply involved with a young team of founders out to do something incredibly special.” Ranking Analysis - Michael Moritz Has this investor’s guidance as a Has the investor backed Has the investor had a significant board member helped startups profitable ventures consistently? impact at a firm? succeed? 9 9 - Leader at Sequoia for a decade 8 - Helped Google succeed Has this investor founded any Does the investor back Has the investor changed the successful startups? profitable ventures early? thought framework for how VC investments are conducted? 1- None founded himself 8.5 9.5 - In tune with to Steve Jobs’ mindset and excellence 3 - Mary Meeker Kleiner Perkins -> Buoy Current Portfolio Companies - Peloton, Houzz, LegalZoom Exits - Square, Waze, Docusign Quote - “I love data. I think it's very important to get it right, and I think it's good to question it.” Ranking Analysis - Mary Meeker Has this investor’s guidance as a Has the investor backed Has the investor had a significant board member helped startups profitable ventures consistently? impact at a firm? succeed? 9.5 - Multiple decades backing 10 - Headlined Kleiner Perkins and 9 - Balances involvement and great startups founded Buoy freedom with the startup Has this investor founded any Does the investor back Has the investor changed the successful startups? profitable ventures early? thought framework for how VC investments are conducted? 1 - No startups founded 9 - Good record of entering startups ahead of Silicon Valley 9.5 - One of the most respected investors in Silicon Valley 2 - Peter Thiel Founders Fund Current Portfolio Companies - Palantir, SpaceX, AirBnB Exits - PayPal, Facebook, Joyent Quote - “We wanted flying cars, instead we got 140 characters.” Ranking Analysis - Peter Thiel Has this investor’s guidance as a Has the investor backed Has the investor had a significant board member helped startups profitable ventures consistently? impact at a firm? succeed? 9 - Maintained top investments 9.5 - Co-founded Founders Fund, Great Facebook and Palantir since early 2000s led it to a top 5 fund guidance Has this investor founded any Does the investor back Has the investor changed the successful startups? profitable ventures early? thought framework for how VC investments are conducted? 10 - PayPal, Palantir 10 -First outside investor in Facebook, early SpaceX investor 9.5 - Use investing to drive change from Zero to One 1 - Marc Andreessen Andreessen Horowitz Current Portfolio Companies - Lime, Slack, Soylent Exits - Mosaic, Netscape, Lyft, Zynga Quote - “You are cruising along, and technology changes. You have to adapt.” Ranking Analysis - Marc Andreessen Has this investor’s guidance as a Has the investor backed Has the investor had a significant board member helped startups profitable ventures consistently? impact at a firm? succeed? 9.5 10 - Founded a top 3 VC firm in 9 - Very involved in leading Andreessen Horowitz startups to succeed Has this investor founded any Does the investor back Has the investor changed the successful startups? profitable ventures early? thought framework for how VC 10 - Netscape, Opsware 9.5 investments are conducted? Yes - emphasis on identifying software startups early Sources http://www.hbs.edu/newventurecompetition/business-track/Documents/FH%20Boston%20Financing%20HBS%20NVC.pdf https://www.angelkings.com/top-venture-capital-firms https://www.techinasia.com/sequoia-accel-andreessen-horowitz-smartest-vcs-west https://medium.com/startup-grind/all-the-venture-capital-fundraising-bloggers-you-should-be-following-6ea9817039c4 https://www.cbinsights.com/research/top-venture-capital-partners/ https://pitchbook.com/news/articles/the-state-of-us-venture-capital-activity-in-15-charts https://angel.co/benchmark-capital https://www.cbinsights.com https://www.linkedin.com/ https://foundersfund.com https://www.sequoiacap.com https://a16z.com https://pitchbook.com/profiles/investor/11295-73.