15 Top Venture Capital Firms in the World (2024 Updated) (2024)

The title of a 2021 Economist article, “the bright new age of venture capital,” seems to perfectly capture a reality about venture capital that is rarely commented on: Venture capital as a concept is still in its infancy. The industry is only limited by people’s drive for new ideas. Not only are American venture capital firms becoming more effective in churning out innovative startups, but the industry is growing apace in regions like Africa, Asia, and Latin America.

In the space of 10 years, venture capital has evolved more in the past decade than it did in the previous three. DealRoom has been witness to and catalyst in this evolution. There is no longer a ‘catch as catch can’ culture in venture capital.

Firms - startups and VC funders - now make project management tools like DealRoom a central part of their due diligence process. This is the DealRoom overview of the world’s top 15 venture capital firms in 2023.

At the VC stage, the startups, early-stage and emerging companies usually require investment to fund their growth ambitions, which is beyond their present ability to generate cash.

How Does Venture Capital Work?

The end goal for venture capital is for investor capital to flow to the best ideas.

This brings benefits for the startup founders and their employees, the venture capital investors, and often society at large, who gain access to a new product or service that enhances their quality of life. Getting the process right, and ensuring capital flows to the ideas that will succeed, goes well beyond just investor returns.

Below, we look at the process for investors and startups.

The venture capital process for investors

The rise of the venture capital industry, and the countless financial press coverage given to unicorns (startups that achieve valuations of $1 billion or more before an IPO), means the big venture capital firms receive hundreds of applications for funding every week. Look at the website of any venture capital fund, and they outline what they’re looking for (revenue, technology, industry, etc.) to filter out as many unsuitable companies as possible. This is the beginning of the VC investor process…

1. Screening

The process through which VC investors work their way through the thousands of applications for funding is known as screening. This involves a designated analyst looking through startup pitch decks, and filter out what appear, at first glance, to be the best candidates for investment (usually around 15-20% of the pile).

2. Partner review

Once a company has made it past screening, an analyst passes the pitch deck to the VC fund’s partners who provide a second, more rigorous set of criteria. Getting past this stage is arguably the hardest of all, as impressing the people who’ve got the ability to write checks is key in VC funding.

3. Initial meeting

As the name suggests, this is where the VC firm meets the startup founder and his/her leadership team. More than a ‘getting to know you’ meeting, as would be the case with a regular first interview, this ia ‘do I want to invest in you’ meeting.

4. Internal review

Having met the startup founders and familiarized themselves with the business model, the partners of the VC firm will hold an internal review - usually once every two-four weeks, to discuss the companies that they see having the most potential. They’ll also use these reviews to discuss potential offers to the startups they’ve seen.

5. Due diligence

‍Due diligence in venture capital is a complex process, whereby the VC firm will ‘look under the hood’ of the startup, understanding the business better, and seeing where the company’s risks and opportunities are. With several due diligence processes running at once, the VC firm is likely to conduct this process using technology.

Additionally, get yourself a copy of our venture capital due diligence checklist VCs use to evaluate companies.

6. Investment committee

The results of the due diligence process of each of the potential investments are brought before the investment committee - usually comprising the partners, some external advisors, managers, and other select individuals - to give the final verdict, and decide which companies are worthy of an offer.

7. Closing

An offer is made to the startup, and a term sheet is drawn up outlining the terms of the deal. The money is transferred to the startup, and their post-money period begins, with the VC firm on-board.

Venture Capital Process for startups

Naturally, the funding process for the startup firm mirrors that of the VC fund in some respects.

For most startup firms, there’s a steep learning curve, where not only is the founding team trying to iron out the early difficulties that the company experiences, but also trying to put together a winning pitch deck (itself no easy feat). To learn more, see what are the 7 crucial steps to take before a VC fundraising round.

The steps generally taken by startup firms to achieve VC funding follow:

1. Prepare documents

The documents that a startup company prepares are how it communicates its value to investors. Although each startup is different, a typical group of startup documents will comprise an elevator pitch, a one-page teaser, a business plan and pitch deck (most relevant of all).

2. Acquire technology

When these documents have been completed, it’s important that they’re shared with the right people through the right channels. This means using a virtual data room, and enabling interested investors to see your documents - and more importantly, that you’ve got your sh*t together.

3. Know your terms

Although the business plan and pitch deck should outline the company’s sources and uses of funds, it’s important for the founder to know what terms the company can stretch to - usually translated to: “How much equity can we give away for the funding being sought?”

4. Select suitable VC firms

There is an expanding universe of VC firms, and it’s important for the startup to choose carefully among them. Although the immediate concern is bringing a cash investment into the company, it’s important for the founder to remember that the investor’s equity share means they’re going to have some input into the management of the company. So they need to be suitable.

5. Field responses

Startup founders, at least those at startups that have potential, will usually talk to several VC investors at once. This is a good opportunity to learn what VC investors ask, where the holes are in the business model, and how the documents can be improved. The models can subsequently be updated in the virtual data room.

6. Review term sheets

Assuming there is interest from the VC side, the startup will receive an offer (or several offers). It’s then their turn to decide which, if any, offers should be accepted, carefully reading through the terms with a lawyer, and seeing what impact any investment would have on the company’s capitalization table.

7. Due diligence

It’s important for the startup to make the due diligence process as simple as possible for the VC firm. Not only will the VC firm be looking at the documents and the business, they’ll also have an eye on how easy it is to deal with the startup during the process. Again, technology makes it easier on everyone here.

8. Closing

Assuming the company passes due diligence, the startup’s management team can decide whether or not to accept the VC fund’s offer to acquire equity. As soon as they sign on the dotted line, the funds are transferred and the partnership begins.

1. Sequoia Capital

AUM: $28B

Location: Menlo Park, CA

Arguably the most famous of all the VC firms, the mere mention of Sequoia Capital as the lead investor has a tendency to bring other investors onto the ticket. They rarely get it wrong. Famous investments include Apple, Cisco, Google, Instagram, LinkedIn, PayPal, WhatsApp, and Zoom.

2. Andreessen Horowitz

AUM: $35B

Location: Menlo Park, CA

Despite having a name that’s associated with some of the biggest names in technology, Andreessen Horowitz is a relatively new player on the block, having only been founded in 2009. Big investment successes for the firm include Facebook, Groupon, Twitter, and Zynga.

3. Kleiner Perkins

AUM: $6.8B

Location: Menlo Park, CA

Kleiner Perkins celebrates 51 years in 2023, and over the past half-century has achieved some notable successes. These have included America Online, Amazon, Electronic Arts, Google, Netscape, Sun Microsystems, and Compaq. In total, the company has been an early investor in close to 1,000 technology companies.

4. Khosla Ventures

AUM: $15B

Location: Menlo Park, CA.

Khosla Ventures is closely associated with Kleiner Perkins, having been established in 2004 by Vinod Khosla, a former general partner at KP. In addition to providing funding for technology firms, Khosla Ventures also invests in cleantech. Its notable investments include Stripe, instacart, DoorDash, and Square.

5. Battery Ventures

AUM: $13B

Location: Boston, MA

Founded 40 years ago in 1983, Battery Ventures is the signature VC firm for Boston. It invests in application and infrastructure software, consumer, industrial technology, and life sciences. Its high-profile investments include CoinBase, Databricks, Glassdoor, and Groupon.

6. New Enterprise Associates (NEA)

AUM: $20B.

Location: Chevy Chase, MD.

Although NEA does have a presence in Menlo Park, like most on this list, its Maryland base makes it an outlier. That said, its age - coming up 50 years now - makes it a go-to for many new startups. Its higher-profile deals have included Patreon, Plaid, Upstart, and UpWork.

7. Founders Fund

AUM: $11B

Location: San Francisco, CA.

Founders Fund is inextricably linked with the names behind it, most notably Peter Thiel and Sean Parker, themselves the founders of firms such as Napster, OpenAI, Palantir, and PayPal. In addition to its most notorious investment, Facebook, Founders Fund investments include Airbnb, Deepmind, SpaceX, Stripe, Spotify, and Lyft.

8. First Round Capital

AUM: $3B

Location: San Francisco, CA.

First Round differentiates itself from most of the bigger VC firms on the west coast in that its modus operandi is to invest at the seed stage. It openly states on its website that Series B and C firms are already too old for their investments. Blue Apron, Rover, Uber, and WarbyParker.

9. Accel

AUM: $50B+

Location: Palo Alto, CA.

Another high-profile VC firm founded in 1983, Accel’s success in California enabled it to spread its wings and open offices in Europe and China. It maintains a broad scope of investments that cover everything from consumer to infrastructure. Its high-profile investments include Etsy, Rovio, Braintree, and Atlassian.

10. Greylock Partners

AUM: $3.5B

Location: Menlo Park, CA.

The oldest firm on the list is closing in on 60 years. Greylock’s ability to continuously rejuvenate and evolve its investment strategy is a testament to its management team, which includes Reid Hoffman, a co-founder of LinkedIn. Its high-profile investments include Facebook, Figma, Discord, and CoinBase.

11. Tiger Global Management

AUM: $125B

Location: New York, NY.

Although Tiger Global is not only a venture capital fund – it also operates in private equity, hedge funds, and other forms of investment – it has been the most prolific of any US venture capital fund since before the beginning of the pandemic. Its high-profile investments include Chime, Data Bricks,

12. Index Ventures

AUM: $13B

Location: San Francisco, CA.

Index Ventures is more commonly known as a European VC firm, but it has two headquarters, one of which is in San Francisco. Founded nearly 30 years ago in 1996, it invests in technology with a focus on e-commerce, fintech, mobility, gaming, infrastructure, and security. Among its more well-known investments are Betfair, MySQL, Facebook, and Zendesk.

13. Softbank Vision Fund

AUM: $154B.

Location: London, UK.

There was a time, about five years ago, when it looked like any new technology-based company with good prospects was nobody unless Softbank Vision Fund had invested in them. Several dud investments later, the shine may have worn off somewhat, but the scale of Softbank’s operations still makes it a venture capital fund to be reckoned with. Famous investments include ByteDance, DoorDash, Revolut, and WeWork.

14. Lightspeed Venture Partners

AUM: $18B

Location: Menlo Park, CA.

Lightspeed Venture Partners was founded in 2000, just as the world of venture capital was hurtling toward the dot-com crash. After riding out that highly turbulent period, it grew considerably, focusing on multi-stage investments in enterprise, consumer, and health. Well-known investments by Lightspeed include Grubhub, Flixster, Cameo, and Giphy.

15. Spark Capital

AUM: $5B

Location: San Francisco, CA.

Spark Capital was founded in 2005 with a broad mandate to invest in early-stage consumer, commerce, FinTech, software, frontier, and media companies. The company admits that it has been effective in using project management software, like DealRoom, to provide all partners with an overview of each deal, not just the partner assigned to the deal. Its well-known investments include Twitter, Tumblr, Oculus, and Snap.

Additional Resource: Top 21 VC Firms in The World

Conclusion

The Chinese proverb that says ‘nothing is as powerful as an idea which has come’ underpins the thinking of the venture capital industry. But the bigger the firm, the bigger the organizational and project management challenge.

All of the firms on the list use virtual deal room technology in one form or another. It is a certainty. There’s also a good chance that many of the firms they’ve recently invested in have done likewise.

That’s as good a message as any to a startup founder about the importance of acquiring a solid VDR to drive the VC funding process.

Get the latest M&A tips & news delivered straight to your inbox