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If you’ve ever wondered how new and exciting inventions and businesses get funded, look no further than the cohort of wealthy venture capital firms residing in the United States. These firms pick and choose from various start-up businesses they want to invest in, intending to make massive profits.
Think of it as if you were applying for a loan, except you only receive the money because the person you loaned from “sees something in you” and expects you to turn that money into profit.
In a general sense, venture capital is a form of private equity that mainly invests in start-up businesses that are predicted to expand and show long-term growth.
Venture capital firms differ from banks or other organizations that provide loans in the sense that they get funds from investors, allowing them to invest in businesses that would otherwise be considered too risky in the eyes of other lenders.
All that being said, venture capital firms can be extremely profitable. Most major firms in the United States are worth billions of dollars and invest in thousands of businesses per year.
So who are some of the most important venture capital firms in the United States? To answer that, we’ve assembled a list of the eight most successful venture capital firms in the United States, based on their 2020 Investment-to-Exit Ratio.
Intel Capital — Santa Clara, California
Tiger Global Management — New York City, New York
Bessemer Venture — San Francisco, California
Kleiner Perkins — Menlo Park, California
New Enterprise Associates (NEA) — Chevy Chase, Maryland
Accel Partners — Palo Alto, California
Sequoia Capital — Menlo Park, California
Khosla Ventures — Menlo Park, California
8 Largest Venture Capital Firms in the United States
Investment-to-Exit Ratio: 28.5%
Total Investments 2020: 1,338
Total Exits 2020: 381
Founded in 1991, Intel Capital is the highly successful venture capital arm of Intel that has grown to operate across the United States, China, Western Europe, and Israel.
Generally speaking, this firm specializes in funding technology startups, such as businesses with artificial intelligence (AI), software security, 5G & communications, robotics, semiconductor manufacturing, and more.
With an Investment-to-Exit Ratio of 28.5% across 57 countries, Intel Capital’s numbers are truly impressive. Over the years, the company has provided capital as a lead investor to thousands of start-up businesses, of which over 83% make it to the initial public offering (IPO) stage.
Overall, Intel Capital is an impressive technology-based venture capital firm with a considerable knack for investment. Some of their most recognizable investments include Broadcom, Citrix Systems, and WebMD.
Tiger Global Management
Investment-to-Exit Ratio: 24%
Total Investments 2020: 558
Total Exits 2020: 83
Tiger Global Management was founded 20 years ago in 2001, and since then, has grown to amass a staggering $50 billion assets under management (AUM).
With locations in New York, Hong Kong, Beijing, Singapore, and Bangalore, Tiger takes in a huge amount of money each year, as in 2020 alone, the firm earned its investors $10.4 billion. As such a powerhouse of a venture capital firm, it’s no wonder Tiger makes a list.
It’s worth noting that Tiger Global Management invests in a broader range of start-up businesses than some other firms on this list. For instance, the firm has been known to invest in the internet, software, consumer, and some financial technology industries. Some of their most well-known investments include Credit Karma, Coinbase, Facebook, Spotify, and Instacart.
Investment-to-Exit Ratio: 21.65%
Total Investments 2020: 910
Total Exits 2020: 197
Founded in 1974, Bessemer Venture originally focused its investments around the steel industry. However, over time the firm has shifted toward supporting the health industry and consumer technologies, boasting impressive returns on their investments. Overall, Bessemer Venture has an investment-to-exit ratio of 21.65%.
This venture capital firm especially shines when assuming the role of lead investor. For instance, out of the 34% of investments where they served as the lead investor, 63.75% became successful businesses. Some of the firm’s most significant investments include Pinterest, Shopify, Yelp, LinkedIn, and Skype.
Altogether, Bessemer Venture has raised a considerable $6 billion through its investments and continues to be a strong, global venture capital firm.
Investment-to-Exit Ratio: 21.13%
Total Investments 2020: 1,136
Total Exits 2020: 240
Kleiner Perkins is a diverse venture capital firm investing in software, hardware, healthcare, mobile, internet, and biotechnology industries.
As with other venture capital firms, Kleiner Perkins was founded in the 1970s, so their interests have shifted over time. For example, in the past, they favored software and hardware companies, whereas today, the firm invests in all of the industries mentioned above.
All of these new investments have proven rather successful as well, as Kleiner Perkins earned an investment-to-exit ratio of 21.13% in 2020. Impressively, the firm also has an investment success rate of 79% when acting as a lead investor.
Overall, Kleiner Perkins is a remarkably successful venture capital firm. Some of their most well-known investments include industry giants such as Amazon, Twitter, and even Google.
New Enterprise Associates (NEA)
Investment-to-Exit Ratio: 20.96%
Total Investments 2020: 1,589
Total Exits 2020: 333
As one of the only venture capital firms on this list with a headquarters located on the east coast, the New Enterprise Associates (NEA) has been an important capital firm for over 40 years.
In fact, in 2007, the NEA was the largest venture capital firm in the world. Today, the firm is still a major investor and has a presence in Israel, India, and several locations across the United States.
Overall, the NEA invests in a broad range of businesses, from the consumer and enterprise sectors to the healthcare industry. While their investment-to-exit ratio of 20.96% is already noteworthy, the firm’s success rate when funding businesses as the lead investor also increases to 57.41%.
Some of the NEA’s most well-known investments include companies like 23andMe, Uber, Duolingo, Buzzfeed, and more.
Investment-to-Exit Ratio: 20.77%
Total Investments 2020: 1,348
Total Exits 2020: 280
Currently operating in the United States, UK, China, and India, Accel specializes in funding early start-ups for software, mobile technology, enterprise, and internet companies. The firm has an impressive investment-to-exit ratio of 20.77%, which increases to 55.56% when they act as a lead investor.
An example of this success can be seen in Accel’s 2019 Series A of European and Israel startups, which amassed $3 billion in funds for the firm.
Worldwide, Accel has invested in thousands of start-ups that have grown to become huge successes. Overall, some of the most known companies this firm invested in include: Etsy, Facebook, Spotify, Dropbox, and more.
Investment-to-Exit Ratio: 20.71%
Total Investments 2020: 1,275
Total Exits 2020: 264
Established almost 50 years ago in 1972, Sequoia Capital has grown to maintain offices in the United States, India, Southeast Asia, Israel, China, and a recent UK office built-in 2020.
Today, this venture capital firm specializes in supporting companies in their early and late-growth stages across several sectors. Some of these include energy, financial, healthcare, and internet industries.
Sequoia Capital has an impressive investment-to-exit ratio of 20.71%, which jumps to an even higher 63% when the firm acts as the lead investor. Of their 1,275 investments, some of the most successful and well-known include NVIDIA, Instagram, Google, PayPal, and YouTube.
Investment-to-Exit Ratio: 13.58%
Total Investments 2020: 707
Total Exits 2020: 96
Though Khosla Ventures’ investment-to-exit ratio is noticeably lower than the other firms mentioned in this list, that can partially be attributed to the fact that it is also one of the youngest firms on the list. Founded in 2004, Khosla Ventures has already amassed over $5 billion in AUM and invested in a large 707 businesses.
Currently, this venture capital firm has focused its efforts in China and the United States, earning an investment-to-exit ratio of 13.58%. Some of Khosla’s most impressive investments include DoorDash, Academia.edu, and Square.
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