A new report by research firm PrivCo found that newer generation of venture capital firms had more success in 2012 compared to traditional venture capital firms when measured by the number of exits in US private technology companies from their portfolio. The report compiled a list of the top twenty venture capital firms based on the number of private tech company exits through acquisition. Exits via initial public offer were not included when ranking a venture capital firm. Intel Capital, the venture capital division of chipmaker Intel Corp. topped the list for the highest number of exits for the year. Among the names missing from the list were older venture capital firms Kleiner, Perkins, Caufield & Byers (KPCB), Lightspeed Venture Partners, and New Enterprise Associate (NEA). Even the prestigious though relatively young venture capital firm Andreessen Horowitz did not make the top 20.
The Top 20 VC Firms
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While Intel Capital took the top honors for the maximum number of exits in the year 2012, newer generation of VC firms Felicis Ventures and SV Angel came in second and third respectively. Sequoia Capital had the fourth highest number of exits and it was followed by First Round Capital. Notable exits of Intel during the year include the genealogy site Ancestry.com, cloud-based gaming firm Gaikai and software company DynamicOps. Felicis Ventures was a major backer of enterprise Wi-Fi startup Meraki, which Cisco acquired in November for $1.2 billion in an all cash deal. Its other winners include social advertising startup Wildfire, which was sold to Google for $250 million. Venture capital SV Angel’s big success came in June when its portfolio company Yammer, an enterprise social networking startup was acquired by Microsoft for $1.2 billion.
Other venture capital firms that made it to the top 20 were Battery Ventures, Draper Fisher Jurvetson (DFJ), Greylock Partners, Ignition, Google Ventures, True Ventures, Benchmark Capital, Lerer Ventures, Menlo Ventures, Polaris Venture Partners, Accel Partners, Bain Capital Ventures, Redpoint Ventures, RRE Ventures, and Focus Ventures.
Partners Of New Generation VC Firms Have Entrepreneurial Backgrounds
The report noted one key distinction between partners of traditional and upstart venture capital firms. Partners of the new wave of VC firms had entrepreneurial backgrounds, while the established firms were backed by partners who had mostly investment and financial background. PrivCo venture capital deals manager Alex Tarantino says that in addition to providing financial backing, the upstart venture capital firms provide startups with extensive guidance in realizing their vision. Commenting on this trend of entrepreneurs becoming venture capital partners, Peter Cohan, president of management consulting and venture capital firm Peter S. Cohan & Associates says that entrepreneurs are becoming wealthy enough to finance companies faster. He adds that their value added advice is becoming more specialized and is often more valuable than their capital.
Though data from Price Waterhouse Coopers and the National Venture Capital Association show that venture capitalists did fewer deals and invested less money in 2012 compared to 2007, it is interesting to note that many newer venture capital firms figured among the top performing firms in the last year. From a job seekers perspective, notable success of newer generation venture capital firms expands the list of hot venture capital firms they can target.
