Best Growth Shops
Looking to leave UMM/MF PE, what are the best growth shops right now? I know there are traditional VC firms, growth equity firms, and crossovers. I am not really interested in the more bootstrapped buyout investing, more so thinking about growth VC. Would really appreciate a layout of the landscape on who the best players to target are.
Based on the most helpful WSO content, here’s a breakdown of the best growth shops across different categories:
MegaFunds with Growth Equity Arms
These are large, established firms with dedicated growth equity strategies: - Blackstone Growth - KKR Growth - General Atlantic - TPG Growth - Bain Capital Tech Opportunities
Tech/Enterprise SaaS-Focused Growth Equity Firms
These firms specialize in tech and SaaS investments: - IVP - Insight Partners - Spectrum Equity - Summit Partners - TCV - TA Associates - Greenspring - Adams Street - JMI Equity - Greycroft - SGE - Volition - GS Growth
Mid-Market/Tech Growth Equity Firms
These firms focus on mid-market tech investments: - LLR Partners - Accel-KKR (AKKR) - Level Equity - Kayne Anderson - Silversmith Capital Partners - FTV Capital - Norwest Venture Partners (their growth fund leans mid-market)
Venture Capital Firms with Growth Equity Arms
These are traditional VC firms that also have growth equity strategies: - Sequoia - Andreessen Horowitz - General Catalyst - Accel - Index Ventures - Menlo Ventures - Bessemer Venture Partners
Crossover Funds
These funds operate at the intersection of VC and PE, often investing in later-stage growth companies: - Dragoneer Investment Group - Iconiq Capital - CapitalG (Google’s growth equity arm)
Key Considerations
If you're looking to transition from UMM/MF PE, targeting firms like General Atlantic, Insight Partners, or TCV could be a great fit, as they value candidates with strong PE backgrounds.
Sources: Tech Growth Equity vs Tech Leveraged Buyout Firms, Why the hate towards growth PE / sourcing (e.g. KKR Tech)?, Top Venture Capitals that hire juniors?, Are Growth Equity / Venture Growth Firms Still Open to Unique Backgrounds, Landscape of Growth Equity in 2020
I put them in two buckets:
1) High-growth, sexy and cash-burning growth investment: ICONIQ, TCV, Index, Sequoia, A16z, Tiger (struggling), etc.
2) Growthy deals but more PE investor mindset: General Atlantic, TA, Silver Smith, Summit Partners, MF PE Growth Arms (BX, KKR, CVC, TPG, etc.)
Probably the second bucket is in average doing better returns than the first one imo, but they have a more PE DD style than “let’s back visionary founders” mindset
This is very helpful, thanks. Definitely more interested in category 1 than 2 because I'm not super interested in bootstrapped companies. Who are some of the best players in that category, though? I know a lot of the shops are struggling because of deployment during the SaaS boom in 2021.
In category one I would say the best investors are:
Summit Partners is a great one, they invested in a company I used to work at that was much more consumer retail than tech growth.
I joined the company when it was MF PE backed (Summit sold it to to a consortium led by a MF PE). Company grew insanely fast with Summit's help. Ended up making a lot of the original equity owners millionaires when Summit exited.
At which growth shops can you do internships at? I know that tcv and TA generally dont take any interns in london.
In London very few, maybe One Peak and KKR growth but seems unstructured
If you're into healthtech, General Catalyst is* a behemoth in that space. Their CEO is ultra aggressive. A lot of the highly regarded early stage / profitable scaleups in that space right now are backed by them.
If you're a healthtech founder, there is probably no better brand name to back you right now.
Add Meritech, IVP, Bond, Spark (Growth Arm) to 1st category.
Seeing a lot of names here that I recognize, but I still don't know which ones are good... Curious which ones are actually elite shops for "high-flying, sexy growth," because I've heard bad things recently about Insight and TCV, and I don't want to give up my seat for a struggling, non-elite fund.
Actually heard negative things about Insight’s culture, very sharp elbowed. Thrive is another one I’d flag — they’re pretty incredible returns-wise, but good luck getting a job there
General Catalyst, Sequoia, A16Z, Index are all pretty differentiated from a fund size standpoint for VC growth. All perform well in specific sub sectors (albeit struggle in others). Lightspeed is also huge but notably has struggled recently
This is super helpful. Any thoughts on the VC growth specialists? Would appreciate any insights on which ones are good seats.
They’re all solid, but there tends to be a lot of churn from what I’ve seen. Sequoia + Index pay the most — both extremely reputable early stage investors whose brands will take you far. A16Z really strong in hard tech, defense, health/bio, GC very strong in healthcare, fintech, defense
They’re all great seats tbh. I would only caution that the funds that have less specialized growth arms will probably lean into their VC dna when it comes to things like DD depth, deal volume, etc
what have u heard about insight? mind pm-ing me?
This is my opinion (in order of prestige), highly subjective, likely forgetting some important ones. Some of these performed terribly in 2020/2021 in the ZIRP era so their legacy is TBD.
Venture Growth: Sequoia, A16Z, Accel, Index, Insight, BVP, NEA, Thrive, KP, GC, Bond, IVP, Lightspeed, ICONIQ, Capital G, Meritech, NVP (venture), Battery Ventures, Spark, Redpoint, Stripes
Bootstrapped + Buyout Growth: GA, TA Associates, Summit, TPG Growth, Thoma Bravo, Blackstone Growth, PSG, NVP (growth), FTV, Great Hill, Spectrum, Silversmith, Sageview
Crossover: Coatue, Dragoneer, Greenoaks, Altimeter, TCV, Tiger Global
Any idea what comp/exits look like at the bootstrapped / buyout growth firms? Would you be able to move from one to a crossover fund?
Comp is usually 75-100% of the PE equivalent for growth buyout, excluding outliers
Exits are normally other growth firms or startups
For crossover I would look first hand on linkedin where each firm hires from
I know you said this is subjective, but this list is pretty contrarian. Ordering here is honestly laughable, clearly written by someone not in the industry. TCV and Tiger Global belong at the bottom of the crossover list. FTV are bootstrapped investors not venture growth investors. Insight, BVP, Lightspeed, and NEA aren't as good at venture growth as many of the firms below them. GC as well. Where is Accel...? Redpoint and Spark should be way higher up. Missing a couple of top crossover players as well.
For OP, within venture growth, you will be best served going to any top crossover (that isn't TCV or Tiger Global), a top multi-stage growth team (Sequoia, Index, KP-caliber, not NEA, BVP-caliber), or one of the venture growth-focused shops (BOND, IVP, Meritech, ICONIQ - other than AN2 in IB-Cov, I don't know a single person who would turn down a job at one of these four for BVP, NEA, Insight, or GC).
I don’t know why you propose top multi-stage firms like there is any chance someone from UMM / MF PE who barely knows anything about growth would ever get a job there, thats completely unrealistic.
I also strongly disagree that IVP and ICONIQ are clearly more prestigious than BVP, NEA, Insight, and GC —implying that is a no brainer is a hot take
BOND and Meritech I could be convinced are more prestigious because the average investor there is very sharp and (I would assume) well comped
In hindsight I agree Tiger should be at the bottom, FTV should be in bootstrapped / buyout, and Accel should be included. What are some other good crossover funds that could be added?
A quick search of people who do growth at multi-stage firms would tell you that it's very feasible to get it out of MF PE. For venture growth, those two are 100 percent better and I think most people actually in VC would agree. BVP and NEA's bread and butter is early-stage not growth (brand name in early stage in my opinion does not equal prestige in venture growth). Insight was plagued with bad returns since they tossed money at literally anything but honestly post-Wiz acquisition things are looking better for them (as long as they don't try and index the private tech market again). Crossover-wise Alkeon and Ribbit should be there (Ribbit is literally one of the top-performing funds of the last decade lol).
I just feel like your list is driven by who has the largest LinkedIn and Forbes presence and not who are respected/good investors in venture growth. Also, for context, I work at a "prestigious" multi-stage, and I think a lot of people, not just you, equate robust early-stage history and returns with good/prestigious venture growth investing and that's so far from the truth (they are fundamentally different types of investing - think of how BX/TB Growth are absolutely terrible even though their firms are top names in PE). Also MSing my stuff as low quality when you're editing your comments based on what I said is ridiculous. Classic banker behavior.
DST is another great shop.
Can anyone comment on GS growth, specifically returns and expertise? Looks to me like they are followers and the fund returns are mediocre at best, but just my perception. There was an article a few years back that they were crushing it but that was when everything in tech was multiplying in value. Curious as to how they have performed recently in a tougher investing climate...
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