Different types of VC firms?
I'm just curious about how people in the industry would segment different types of VC firms. Would you split it into crossovers, seed funds, early-stage, etc? Or is there some other way to better segment funds? Obviously, funds like Pear VC, Dragoneer, and Sequoia are vastly different, but I just don't know what category some other funds like Lightspeed or DST Global would fall under. I would appreciate it if someone could lay out how most of the industry segments VC firms, and who the big players in these segments are. Thanks!
Yes! You have the right idea of segmenting firms base on investment stages (Seed, Early Stage, Growth Stage, Evergreen-Holding forever even after IPO).
Sequoia is an interesting case where it holds different fund vehicle for each of the stages: Seed to Evergreen. DST and Dragoneer would be a global cross over fund will Lightspeed does a mix of Seed and Early Stage deals. Not too familiar with Pear but they appears to be seed/pre-seed focused. Additional VC firms categories I would add are
1. Sector specific thesis: Ribbit (Fintech), Owl Venture (Edtech)
2. Geography specific thesis: some are city focused, other might by country or continent
3. Corporate Venture Arms: Samsung, Toyota, Qualcomm, Nvidia
4. Government: various Sovereign wealth funds, In-Q-Tel, Temasek
5. Family offices: investment entities for high wealth individuals or families
This is not really how people in the industry talk about it at all, but I would say if you were to show the following breakdown to someone in the space, they would probably agree they subconsciously categorize firms into one of these four categories. If you are entering the space, I think its worth at least reading through this.
1) Manic : Usually obsessed with deal flow and writing blog posts to generate exposure for their firm. They are probably spending more time doing interviews, tweeting, writing on Medium, and going to Burning Man than actually working. They have a very very aesthetic website that is super trendy, and they probably have a decent amount of investments that belong in a skit about dumb startup ideas (ex: uber for cats or something). Some of them are actually visionaries, but a lot of them are probably too optimistic. The work you will do here will likely be chaos.
2) Level-headed: These are the middle path VCs. They have a thesis and ideas about investing, but they mainly invest based on a reliable strategy. They might experiment a little and try to mix things up in the space, but they stick to the fundamentals. They will have a decent culture without it being too niche.
3) Ghosts: You could probably only find them by looking in the investor's section of a startup they invested in. They have a super minimalistic web presence, their LPs are family funds, and they mainly invest based on inbound deal flow. These guys are worth knowing because if you are leading a raise, you can reliably get them to co-invest if you in their network. They will likely have no culture and be super formal. However, because of their setup, you won't have to do much work.
4) Mega: Sequoia, Insight, Tiger, etc... These guys are massive and are run more like a bank than a VC firm. Because of this, they have an investment process very similar to what you may see an analyst doing at a bank in terms of the amount of grinding they have to do (substance wise it might be super different).
If you want to work somewhere I would say aim for a level-headed firm, but Mega is good too.
I know you have examples for the last category, but I am curious about what funds fall into the former three categories
While I have plenty of examples, I don't want to "name names" so to speak. Moreover, the VC space is incredibly fragmented compared to banking. Mega-firms such as Sequoia, Insight, Pegasus, and Bessemer are the exception, not the rule. I would say the large majority of VC firms have team sizes under 15 when you look at actual employees of the firm (not interim EIRs, technical advisors who are paid as contractors, or committee members).
Manic: (these funds tend to not do well, so they're aren't many examples you would know)
Level-headed:
Ghosts:
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