Venture capital (VC) companies invest in the products and services consumers use every day, from booking accommodation through VRBO to purchasing groceries through Instacart. Venture capital companies fund and mentor young or emergent start-up companies with high growth potential. Commonly, these are firms with an innovative product or business model in information technology, biotechnology, or clean technology. Unlike private equity firms, VC companies tend to take a minority stake of 50% or less for each investment they make. These investments have a high risk of failure, so venture capital firms invest in a portfolio of companies with the expectation that at least one will become successful.
Sequoia Capital is a California-headquartered venture capital firm that invests in the mobile, internet, energy, media, and retail sectors. Since it was founded in 1972, the company claims early-stage involvement in companies with a now aggregate public market value of $3.3 trillion. Some of the more notable companies Sequoia Capital invested in include Instagram, Zoom, Oracle, Apple, LinkedIn, and WhatsApp.
DST Global is a venture capital firm founded in 2009 by Russian entrepreneur Yuri Milner. The company has offices in New York, London, Beijing, Hong Kong, and Silicon Valley.
DST Global is one of the world’s leading internet investment companies, with investments in Alibaba, Spotify, Twitter, Facebook, Acorns, DraftKings, Klarna, Slack Technologies, and Robinhood.
Tiger Global Management
Tiger Global Management is a New York City-based investment firm specializing in consumer, financial technology, internet, and software companies.
Tiger Global Management tends to focus on growth-oriented private companies with an emphasis on American, Chinese, and Indian businesses. The firm prefers to partner with dynamic entrepreneurs in charge of market-leading growth companies.
Notable investments, which range from Series A to pre-IPO funding, include Glassdoor, GitLab, Square, Quora, and Postmates.
Y Combinator is an American tech start-up accelerator founded in March 2005 by Paul Graham, Jessica Livingston, Robert Morris, and Trevor Blackwell. The company’s accelerator program is well known amongst start-ups, having funded over 3,000 ventures to date.
Y Combinator interviews and selects two or more intakes of companies on an annual basis. Successful applicants receive seed funding, professional advice, and industry connections in exchange for Y Combinator taking a 7% stake.
Recent accelerator program graduates include Women Who Code, Brex, Rappi, and Upsolve.
Kleiner Perkins is an American VC firm with a preference for incubation, early-stage, and growth companies. The company was founded in 1972 by Eugene Kleiner, Thomas Perkins, Frank J. Caulfield, and Brook Byers. The New York Times described Kleiner Perkins as “perhaps Silicon Valley’s most famous venture firm”.
Kleiner Perkins has made several high-profile investments over the years. The company invested $200 million toward smartphone innovation in 2008, with another $500 million toward a growth-stage clean technology fund a year later. In 2010, the sFund was also established with $250 million to invest in social start-ups.
To that end, Kleiner Perkins has been an early investor in companies such as Amazon, Compaq, Google, Nest, Sun Microsystems, Slack, Zynga, Modern Health, DJI, and Coursera.
- Venture capital companies fund and mentor young or emergent start-up companies with high growth potential. Unlike private equity firms, VC companies tend to take a minority stake of 50% or less for each investment they make.
- Sequoia Capital is a firm that has invested in early-stage growth companies now worth a combined $3.3 trillion. Tiger Global Management prefers to partner with entrepreneurs running market-leading businesses from Series A to pre-IPO funding.
- Y Combinator runs a tech accelerator program that offers specialized knowledge and industry contacts to start-ups in exchange for a 7% stake. Kleiner Perkins is perhaps the most notable VC firm, investing hundreds of millions of dollars into social, clean technology, and smartphone innovation start-up funds.
- Definition: Venture capital companies fund and mentor start-up companies with high growth potential. They typically invest in innovative companies in sectors like information technology, biotechnology, and clean technology.
- Key Features of VC Companies:
- VC companies take a minority stake (usually 50% or less) in each investment.
- They invest in a portfolio of companies due to the high risk of failure, hoping that at least one becomes successful.
- Notable VC Companies:
- Sequoia Capital: Founded in 1972, it invests in mobile, internet, energy, media, and retail sectors. Notable investments include Instagram, Zoom, Apple, and WhatsApp.
- DST Global: Founded in 2009 by Yuri Milner, it has invested in Alibaba, Spotify, Twitter, and Facebook.
- Tiger Global Management: Focuses on consumer, fintech, internet, and software companies, often partnering with market-leading growth businesses.
- Y Combinator: A well-known tech start-up accelerator founded in 2005, it funds over 3,000 ventures through its accelerator program.
- Kleiner Perkins: Established in 1972, it prefers incubation, early-stage, and growth companies. It has invested in companies like Amazon, Google, and Nest.
Main Free Guides:
- Business Models
- Business Competition
- Business Strategy
- Business Development
- Digital Business Models
- Distribution Channels
- Marketing Strategy
- Platform Business Models
- Revenue Models
- Tech Business Models
- Blockchain Business Models Framework
Connected Financial Concepts
- Accounting Equation
- Financial Statements In A Nutshell
- Cash Flow Statement In A Nutshell
- How To Read A Balance Sheet Like An Expert
- Income Statement In A Nutshell
- What is a Moat?
- Gross Margin In A Nutshell
- Profit Margin In A Nutshell
Main Free Guides: