Growth VC Specialists - Updated Views

In some previous threads, I have seen a lot of people lump together BOND, ICONIQ, IVP, and Meritech as the growth VC specialists. I was curious if there were any missing that are similar to these funds. Also, I was interested in hearing general perspectives about these firms (like reputation, performance, culture, etc.). 

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Based on the most helpful WSO content, BOND, ICONIQ, IVP, and Meritech are indeed recognized as prominent growth VC specialists. These firms are known for their focus on late-stage investments in high-growth companies, particularly in the tech sector. Here's a breakdown of their general reputation and performance:

  1. BOND: Known for its strong focus on tech and consumer internet companies, BOND has built a reputation for backing innovative, high-growth businesses. It is often seen as a continuation of the legacy of Kleiner Perkins' growth fund.

  2. ICONIQ: ICONIQ Capital is highly regarded for its exclusive network and ability to attract top-tier tech investments. It operates as both a growth VC and a wealth management platform, which gives it a unique edge in accessing deals and building relationships.

  3. IVP (Institutional Venture Partners): IVP is one of the oldest and most established growth VC firms, with a strong track record of investing in late-stage, high-growth companies. It is well-regarded for its disciplined approach and consistent performance.

  4. Meritech: Meritech Capital Partners is another top-tier growth VC firm, known for its focus on late-stage investments in tech companies. It has a reputation for being selective and partnering with companies that have already demonstrated significant traction.

Additional Firms to Consider:

If you're looking for similar firms, here are a few others that align with the growth VC model: - General Catalyst: Known for its growth equity arm, which focuses on scaling high-growth companies. - Accel: While traditionally a VC, Accel has a strong growth fund that targets later-stage investments. - Sequoia Growth: The growth arm of Sequoia Capital, focusing on scaling businesses with proven market fit. - Andreessen Horowitz (a16z): Their growth fund is highly active in late-stage tech investments. - CapitalG: Alphabet's growth equity arm, specializing in tech companies with significant growth potential.

General Perspectives:

  • Reputation: These firms are highly respected in the industry, often associated with backing some of the most successful tech companies.
  • Performance: They have a strong track record of delivering returns, thanks to their focus on high-growth sectors and companies.
  • Culture: While specifics can vary, these firms are generally known for their fast-paced, high-performance environments. ICONIQ, for instance, is noted for its exclusivity and network-driven approach, while IVP and Meritech are seen as more traditional in their investment strategies.

If you're considering opportunities at these firms, it's worth noting that they often recruit from top-tier investment banking or consulting backgrounds, particularly those with tech experience.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

I'd say BOND and IVP are most similar in terms of focus, caliber and general background of the non-GP team. BOND was the ex-KP Growth team and have a strong track record from running multiple funds there before striking out on their own. IVP has been around for a while (since 1980) and is a bit more, well, "Institutional". Both have great track records and have a track record of leading large rounds in high growth companies. 

ICONIQ is good but since it's more like a PWM they have a different return threshold vs. the strict 3x MoM, >20% IRR. They have much bigger funds than BOND or IVP ($2B) so I get the sense they have to make a lot more deals and will go much later stage. 

Meritech is more of boutique and flys under the radar, but the team there is great. They do a lot of good research, the GPs are very founder friendly, and it looks like they've branched out of the traditional B2B SaaS focus. 

Overall getting a gig at any one of these spots is a great career move and learning opportunity at the early stages of your career. Wouldn't bet on becoming a GP though, less upward movement at these types of funds. 

 

Isn't ICONIQ's growth team basically autonomous from the FO? Read online that only 20% of their fund come from the FO, so wouldn't that not really affect their return threshold?

Also, regarding the difficulties of becoming a GP, what's the main move if someone joins one of these funds as an associate? I'm sure it's great learning, but if it's nearly impossible to make GP, what's the logical next step...? Joining an emerging manager or a multi-stage?

 

I had heard Meritech’s performance is great, though I personally have not seen their performance myself.

I met IVP before and saw their performance maybe a year or two ago. It was a bit more volatile. Some of their funds, IIRC, suffered from more B2C exposure and doubling down on those. But they had since moved much more focus to B2B. They did have some challenges like Hopin, FTX… but I’m curious how they’re doing now. I didn’t dig into whether they are (or were) reasonable with their marks.

 

My insights are 5+ years old since I’m not in late stage VC anymore. But I do know people at all these firms, some that are GPs. With few exceptions they all got into those roles by lateraling around.

I’d say half the associates I worked with early on are GPs now and only 2 got there by sticking at the same firm. Everyone else lateraled until they got recruited by bring on the same board with other GPs.

 

Most are whatever the level below GP is. Like Partner/VP/Managing Director etc. Others joined start ups. I’d note that my cohort was early to growth and were very high performers. I wouldn’t expect the same spread for todays cohort of associates. 

 

Realized I didn't want to be the partners I worked for and that my learning style better aligns with building than investing. Quit to co-found a B2B data infra start up that's now at the Series B stage. 

Much more stressful than investing, but way more rewarding and fun. 

 

That's incredible - congrats! I feel like many investors want to be founders but lack conviction in an idea and / or the technical chops (if you have a non-technical background like most investors). How did you ideate it - was it related to your experience / background? Did you consciously think through ideas over months or it came about by chance?

What did you find less appealing about the learning style in late stage VC?

 
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The "idea maze" is one of the toughest parts to navigate through at the beginning. I quit with an idea I had strong conviction in, built something quickly and launched within a week of quitting (I'm not technical). Generated revenue very quickly but it was very much a service vs. a product that was a bit ahead of its time. 

Met up with my now co-founder through mutual friends and we spent 9 months throwing ideas at the wall. Ended up building and selling something during this process and then settled on a problem we both had unique advantages solving. I wish it was more formulaic but the best advice was to fail quickly (establish kill criteria) to get to an idea that stuck. 

Investing as a whole is a different mindset. Unless you're running the shop, you're following an existing investment process and running as many reps as you can through it. I would rather build it from scratch and make my own mistakes but that's probably because I'm a bad employee.

 

Curious about ICONIQ. A lot of the growth team seems super pedigreed, but since they paused hiring and only just started back up, the new analyst/intern class seems to be pulling more from students who didn’t get earlier offers elsewhere.

 

Solid shop, smart people. It's an evergreen fund with Google being the only LP. They get into pretty good deals and operate independently from Google corp dev, GV, Gradient, etc. 

When my friends were there the biggest challenge was the length of the due diligence process. He felt they were closer to a PE mindset which can mean they're missing out on deals if due to lack of velocity. That's purely an anecdote. A lot of their really good people left to be partners elsewhere so idk what upward mobility looks like. 

 

Qui veritatis cum porro et. Corrupti tempora est eveniet illum assumenda modi. Facere quia at nesciunt voluptas aspernatur quod unde et.

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