If you’ve ever wondered how new and exciting inventions and businesses get funded, look no further than the cohort of wealthy venture capital firms residing in the United States. These firms pick and choose from various start-up businesses they want to invest in, intending to make massive profits.
Think of it as if you were applying for a loan, except you only receive the money because the person you loaned from “sees something in you” and expects you to turn that money into profit.
So who are some of the most important venture capital firms in the United States? To answer that, we’ve assembled a list of the eight most successful venture capital firms in the United States, based on their Assets Under Management (AUM) size in 2022.
Andreessen Horowitz
Assets Under Management: $35.9 billion
Headquarters: Menlo Park, California
Founded in 2009 by Marc Andreessen and Ben Horowitz, and located in Menlo Park, California, Andreessen Horowitz invests in start-ups and growth companies.
Generally speaking, this firm specializes in funding in artificial intelligence (AI), software security, healthcare, cryptocurrency, and gaming.
With an AUM of $35.9 billion, Andreessen and Horowitz’s numbers are truly impressive. Over the years, the company has provided capital as a lead investor to thousands of start-up businesses.
Overall, Andreessen Horowitz is an impressive venture capital firm with a considerable knack for investment. Some of their most recognizable investments include Twitter, GitHub, and Smartcar.
Sequoia Capital
Assets Under Management: $28.3 billion
Headquarters: Menlo Park, California
Established almost 50 years ago in 1972, Sequoia Capital has grown to maintain offices in the United States, India, Southeast Asia, Israel, China, and a recent UK office built-in 2020.
Today, this venture capital firm specializes in supporting companies in their early and late-growth stages across several sectors. Some of these include energy, financial, healthcare, and internet industries.
Sequoia Capital has an impressive AUM of $28.3 billion, as well as an investment-to-exit ratio of 20.71%, which jumps to an even higher 63% when the firm acts as the lead investor. Of their 1,275 investments, some of the most successful and well-known include NVIDIA, Instagram, Google, PayPal, and YouTube.
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Dragoneer Investment Group
Assets Under Management: $24.9 billion
Headquarters: San Francisco, California
Founded in 2012 by Marc Stad, Dragoneer Investment Group is a growth-oriented investment firm that focuses on technology companies.
Notable investments include AirBnB, Spotify, Etsy, and Instacart. Dragoneer Investment Group uses a long-only strategy and raises money through secondary stock sales, as well as convertible debt notes.
A relatively recent player to the Venture Capital Firm industry, Dragoneer has already made a signficant impact, as its AUM of $24.9 billion reveals.
New Enterprise Associates (NEA)
Assets Under Management: $17.8 billion
Headquarters: Chevy Chase, Maryland
As one of the only venture capital firms on this list with a headquarters located on the east coast, the New Enterprise Associates (NEA) has been an important capital firm for over 40 years.
In fact, in 2007, the NEA was the largest venture capital firm in the world. Today, the firm is still a major investor and has a presence in Israel, India, and several locations across the United States.
Overall, the NEA invests in a broad range of businesses, from the consumer and enterprise sectors to the healthcare industry. While their investment-to-exit ratio of 20.96% is already noteworthy, the firm’s success rate when funding businesses as the lead investor also increases to 57.41%.
Some of the NEA’s most well-known investments include companies like 23andMe, Uber, Duolingo, Buzzfeed, and more.
Deerfield Management
Assets Under Management: $16.2 billion
Headquarters: New York, New York
Founded in 1994 by Arnold Snider, Deerfield Management is a venture capital firm that specializes in investing in healthcare and biotech. In fact, its dedication to healthcare makes Deerfield stand out among its competitors.
Some of Deefield’s more popular investments include Novartis, Epic Sciences, Tesaro, and Adeptus Health.
With an AUM of $16.2, Deerfield Management continues to play an important role in both the venture capital and healthcare industries.
Greenspring Associates
Assets Under Management: $17.0 billion
Headquarters: Owings Mills, Maryland
Founded in 2000, Greenspring Associates has expanded its services all across the world, from London to Beijing. A pioneer of the “flywheel” method to venture capital investing, Greenspring blends funds with direct and secondary investments, while simultaneously offering bespoke solutions.
Greenspring is involved in a variety of industries, with investments in companies like GrubHub, Chewy.com, ScanSafe, and Workfront.
Its AUM of $17.0 billion ensures that Greenspring will have a significant impact on any company it wishes to invest in.
Khosla Ventures
Assets Under Management: $14.0 billion
Headquarters: Menlo Park, California
Though Khosla Ventures’ has a lower AUM than the other firms mentioned in this list, that can partially be attributed to the fact that it is also one of the youngest firms on the list. Founded in 2004, Khosla Ventures has already amassed over $5 billion in AUM and invested in a large 707 businesses.
Currently, this venture capital firm has focused its efforts in China and the United States, earning an investment-to-exit ratio of 13.58%. Some of Khosla’s most impressive investments include DoorDash, Academia.edu, and Square.
Lightspeed Venture Partners
Assets Under Management: $7.7 billion
Headquarters: Menlo Park, California
Founded in 2000, Lightspeed Venture Partners started out with a focus primarily in enterprise software and infrastructure specialists. In recent years, Lightspeed Venture has also become involved in the cryptocurrency and semiconductor industries.
Lightspeed Venture has made investments in companies such as Zola, Cameo, Snapchat, and Flixster.
What is venture capital?
Venture capital is a form of private equity that mainly invests in start-up businesses. Venture capital firms are financial companies that focus on venture capital. They invest in companies that are predicted to expand and show long-term growth. This means that venture capitalists have to have both good prediction skills and the patience to see their predictions pay off.
How are venture capital firms different than banks?
Venture capital firms differ from banks in the sense that they get funds from investors to provide the necessary capital.This allows venture capital firms to invest in businesses that would otherwise be considered too risky in the eyes of other lenders. It also means that venture capital firms have to consider the financial needs and desires of their investors when making decisions.
Are venture capital firms profitable?
Yes, venture capital firms can be extremely profitable. Most major firms in the United States are worth billions of dollars and invest in thousands of businesses per year. However this takes a combination of skill and luck, where venture capitalists can use their abilities to identify key trends in booming industries.
What is the largest venture capital firm in the United States?
The largest venture capital firm in the United States is Andreessen Horowitz. This is based on the size of their Assets Under Management (AUM) portfolio, which, as of 2022, stands at $35.9 billion. The second largest venture capital firm in the U.S. based on AUM is Sequoia Capital, with an AUM of $28.3 billion.
