tl;dr: Money is good. Here’s where to get some more.
DoorDash picked up a massive $127 million Series Cthis week.That round was led by Sequoia. Notably,Sequoia also led thecompany’s $17 million Series A. In between, Kleiner led its $40 million Series B.
So Sequoia led two of the company’s three key rounds, taking a notable breather during DoorDash’sSeries B.Thatinteresting cadence wasn’t lost on Twitter. Silicon Valley’s ambulatory redwood and local ATM Hunter Walk had a hypothesisfor the pattern, saying that the situation can“occur in cases where [an] insider doesn’t want to set pricing in successive rounds.”
In poker terms, that sounds like pot control.
Sequoia put money into all three of DoorDash’s rounds for example, even though it only led two. Two questions: How often are investors writing successive checks into their companies, and which firms write themost successive checks. Let’s find out.
Leading, Following, And Participating
I pulled some Mattermark data to dig into the question. Our recordsdon’t sort lead investors out of a specific round, so I can measurethe pace by which investors write morechecks1, but not if they tookpointor not.
To better understand the current market, I cut broader venture data in a few ways. First, I segmented out the top 250 venture funds in the United States by aggregate amount of capital that they raised in the last three years. The goal was to discard zombie firms, andfirms that might not have recently purchased a fresh set of ammunition. If we are working to understand things as they are now, we have to excise the past.
Withthe help of the Mattermark data team — I now owe many beers to people — I dug out the average number of successive checks that the richest venture funds have written in the past three years.Itworks out to 1.535 per company. That’s a measure of investor velocity. That number is calculated across series rounds, so it includes say, Series A to B, orSeries B to D, etc.
That means that the 250 venture firms in our list wrotean average of 1.535 follow-on checks to their investmentsduringthe last three years.
The number feels right. Many startups raise on an 18 month timeline, so you would expect venture firms to at least double down duringa three year period.Keep in mind that we are not discussing lead checks, but all checks.
Pitch These Firms
The 1.535 figure is interesting, but by itself not very useful. After all, it’s just a single floating data point. Happily, we can do a bit better. If you are an entrepreneur looking for an investor who will show up for your next round, let’s find the top kids.
From our aforementioned data set, here are the top 25 venture capitalists sorted by pace of successive checks to companies over the past three years:
- US Venture Partners
- Psilos Group
- True North Venture Partners
- GreatPoint Ventures
- Morgenthaler Ventures
- Avalon Ventures
- Domain Associates
- RiverVest Venture Partners
- The Westly Group
- Elevar Equity
- Mohr Davidow Ventures
- Fontinalis Partners
- Third Rock Ventures
- Arcus Ventures
- Gentry Venture Partners
- FutureCap
- Shasta Ventures
- Emergence Capital Partners
- Benchmark
- Inventus Capital Partners
- Lightspeed Venture Partners
- FirstMark Capital
- Carmel Ventures
- DCM Ventures
- Union Square Ventures
This list is not historically exhaustive, or predictive of future performance. Instead, it’s a list of which wealthy funds are making the most recurring deals inside of a single company. Loyalty, if you will.
A small caveat: Every venture firm has its own investing thesis. Some defend pro-rata, some do not. Some have a better set of portfolio companies so they are writing more second checks. Some, less. There are many factors going into the above list. All the same, it’s a notable list in that you know many of the names, but not all. Perhaps you should hunt more broadly.
Now, go mix a proper martini and enjoy the weekend.
1. Why do we care about if investors continue to invest in a company as it matures? It’s a very strong positive signal to other investors, and can help the company raise more, and more quickly. Required? No. Useful? Yes. From the other direction, investors that write one check and walk away are just wallets. Investors that work with their investments and help them grow, and continue to support their work are allies. There is a difference.
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FAQs
Write your VC Pitch Deck with Clarity
You should start by defining your company's market, its competitive landscape, and how it solves a problem. Then, describe your business model, your team, and your financial projections. Finally, talk about your growth strategy and any other unique aspects of your company.
How do you write a VC pitch deck? ›
How To Build A Successful Venture Capital Pitch Deck
- Starting A VC Pitch Deck. ...
- Section 1: The problem you're solving. ...
- Section 2: The solution you have to the problem. ...
- Section 3: The product or service you're offering. ...
- Section 4: The market opportunity. ...
- Section 5: The secret sauce. ...
- Section 6: The business model.
Keep your VC pitch short, easy to scan and packed with valuable information
- A clear explanation of the problem your product or service is solving.
- The size of your market and potential competitors.
- Growth models.
- Evidence that your team can pull it off.
Benchmark's current portfolio of early-stage venture investments includes private market leaders such as Airtable, Airplane, Benchling, Cerebras, Chainalysis, co*ckroach Labs, Contentful, HackerOne, LangChain, MindsDB, Modern Treasury, Robocorp, Sorare and Stytch; public companies such as Asana, Amplitude, Confluent, ...
What are the two 2 most important factors investors look for in a pitch? ›
And finally, often the investors say, that two most critical things they are looking for in a pitch are (1) unique idea and (2) passionate and experienced team. All the rest can be supported and brought in by investor.
How do I approach a VC for funding? ›
15 Effective Ways To Prepare To Pitch To VC Investors
- Bootstrap To Start Earning Revenue. ...
- Know Your Business' Solution And Value. ...
- Highlight What Makes Your Business Unique. ...
- Consider Your Long-Term Vision And Exit Strategy. ...
- Develop Your Survival Strategy. ...
- Create A Compelling Business Plan.
The contents of your pitch deck should give a clear and concise overview of your business, there's no need to get incredibly granular. Remember, your goal is to spark an interest that can lead to more detailed discussions with the investor at a later time.
What does a VC pitch deck look like? ›
A VC pitch deck is a presentation (typically in Powerpoint, Google Sheets or PDF) used to explain a startup idea to potential venture capital investors. A pitch deck contains information on the business, the market and the company's traction/financials.
How do you pitch yourself to a VC? ›
It should be concise, compelling, and customized. It should include the following elements: your name, your company name, your value proposition, your traction, your ask, and your contact information. You should also have a longer version of your pitch ready in case the VC wants to know more.
What do you say to convince investors? ›
Show investors that you have not only planned for growth but can also predict it. You should be ready to show how your business model will help your business make more money, and the value of your company (and its stock) will keep on growing.
The 10 Things NOT To Do When Pitching a Venture Capitalist
- Don't forget about the business. ...
- Don't start with the risks. ...
- Don't fundraise based on runway. ...
- Don't ask for money that doesn't match your business stage. ...
- Don't skip business stages. ...
- Don't waste your time talking to the wrong investors.
Putting investment returns aside, here are 9 common traits I find common in great VCs of our time. Good VCs know that they are not operators. Good VCs have to trust the founders they invest in — that founders are the best operators in their field and let them run with the idea.
Do all funds have a benchmark? ›
All managed funds will have an established benchmark by which you can measure the performance of the fund. Investors can also go beyond standard uses of benchmarking. Using indexes to allocate investments to passive funds with specific portfolio allocations can be one advanced use of benchmarking.
How much is benchmark capital worth? ›
The estimated net worth of Benchmark Capital Management Co. Vii, L.l.c. is at least $598 Million dollars as of 2024-04-18. Benchmark Capital Management Co. Vii, L.l.c. is the 10% Owner of Elastic NV and owns about 6,316,577 shares of Elastic NV (ESTC) stock worth over $598 Million.
Should I invest in benchmark? ›
A benchmark should be a “good fit” for your portfolio and your investment manager in terms of the range of securities in which it can invest. A broad investment universe can potentially help increase return and reduce volatility.
Which element of the pitch deck is most important to venture capitalists? ›
In your pitch deck, it's crucial to focus on a substantial, existing problem that your product will solve. Avoid being a solution in search of a problem; instead, demonstrate a clear market need. VCs are more interested in solutions addressing significant pain points than solutions looking for problems.
What are the four key components of the investor pitch? ›
However, by focusing on these four key elements - mission and objectives, monetization strategy, value proposition, and customer segmentation - you can create an effective business model that will help persuade investors that your venture is worth their investment.
What makes you want to pursue a role in venture capital? ›
Why do you want a job in VC? To answer this question, you should demonstrate a clear understanding of the industry and explain how your skills and experiences align with the demands of the role. You can also talk about your passion for innovation and your interest in startups.
What three things are important to remember when you give your pitch? ›
For example your three main points could be 1) problem, 2) action, and 3) solution. The more progression and flow your main points are, the better the idea will “click” in the heads of your audience.
