Introduction
Innovations and entrepreneurship are the pillars of a robust economy, but unfortunately, many innovators and entrepreneurs don’t have the required funds to maximize their products’ market potential.
Start-ups require funding to scale up, but very few investors are willing to invest their trust and resources into a new business.
Banks and other financial institutions also tend to avoid providing financial backing to start-ups as they’re always deemed too risky to lend.
Enter Venture Capital (VC) – a form of private equity financing that involves providing investment funds to companies for share, equity, or ownership stake.
Private and institutional investors are the primary source of VC funding that allows start-ups to get off the ground and founders to accomplish their visions.
What is Venture Capital Firms?
Did you know that most of today’s innovative companies were funded by VC firms?
eBay, Google, Airbnb, Facebook, and PayPal are some of the big names that got funding from VC companies and returned exponential returns in a few years.
Venture Capital firms provide investment or financial funds to start-ups, early-stage, emerging, and established companies with a high-growth potential to scale their reach or earnings.
The growth potential is normally accessed by a feasibility study of the companies’ projected average revenue, management structure, number of employees, and market growth.
Venture capital investments topped a record $621 billion in 2021.
How Venture Capital Firms Work
Venture Capital firms invest in start-ups in hopes of later growth and profit-making.
However, new companies often don’t make it. For every 10 start-ups, 3 or 4 will fail.
If a venture fails, the entrepreneur is typically not required to pay back the capital, meaning venture capital investing is a risky business.
To minimize these risks, Venture Capital firms prioritize investing in start-ups emanating from high-growth industries (IoT, Big Data, Blockchain, AI, etc.).
This means that if a VC firm invests in your start-up, it will try its level best to ensure the start-up thrives. Such efforts can include helping with hiring, core company decision-making, etc.
Venture Capital Firms earn their profit through eventual ‘exit’ scenarios like mergers, acquisitions, and IPOs.
Top Venture Capital Firms to Keep Your Eye On for 2022
In this article, we’ll take a closer look at some of the most renowned capital firms to watch out for in 2022.
Accel
Accel is an American Venture Capital Company that invests in start-ups, early and late-stage companies.
The firm’s vision for business and entrepreneurship allows it to identify and invest in start-ups that will spearhead the growth of next-generation industries. Facebook, Atlassian, Etsy, Braintree, and Cloudera are some of the many profitable companies that have benefited from Accel’s investment funding.
Accel is headquartered in Palo Alto, California, with offices in Bangalore and London. Since its establishment in 1983, the firm has seen over 8 IPOs and high-value acquisitions, including Truebill, which was recently acquired by Rocket Mortgage.
Accel also sponsored Jet, Krux, and Braintree, all of which have been acquired by prominent companies like Walmart, Salesforce, and PayPal, respectively.
Key Individuals: Andrew Braccia, Sameer Gandhi
Focused Industries: Mobile Technology, Consumer Software, e-Commerce, Enterprise Software, the Internet.
Alcor Fund
Alcor Fund was founded in 2010 with a core emphasis on buyouts of financially distressed funds.
Run by Harvard alumni, the global VC firm focuses on Smart Startups, private equity investments, buyouts, and acquisitions.
Alcor Fund provides funding for start-ups at all stages and owns portfolio companies in different sectors. The company boasts over 100 working years in the industry.
Alcor consists of representative directors of ALCOR group companies from all regions in which ALCOR operates (the Americas, Asia, the Middle-East, Africa, and Europe).
Through its network of global investors, Alcor has backed 500+ start-ups across 27 countries.
Key Individuals: George Molakal, Art Holbrook.
Focused Industries: Enterprise Software, Supply Chain, SaaS, Fintech, Healthcare.
Sequoia Capital
Sequoia Capital has been in the venture capital business for 5 decades.
Don Valentine founded the company to “help daring founders build legendary companies.” Taking part in all levels, from the time a company is no more than an idea to the largest funding rounds, empowers entrepreneurs to push the boundaries of what’s possible.
The American private equity firm was among the early investors in Google, YouTube, PayPal, Apple, WhatsApp, Zoom and other major Silicon Valley companies today.
Sequoia Capital’s portfolio management also includes other big names such as Square, Stripe and Airbnb that together control a market capitalization of over $3 trillion.
Headquartered in Menlo Park, California, Sequoia Capital has offices in India, China, Israel, Hong Kong and London.
As of March 2022, Sequoia Capital has made 1,653 investments, with 346 of them being successful exists.
Key Individuals: Douglas Leone, Jim Goetz, Roelof Botha, Alfred Lin
Focused Industries: Energy, Healthcare, Financial, Enterprise, Internet, Mobile Industries
Dale Ventures
Based in Dubai, UAE, Dale Ventures invests in start-ups where it can provide strategic and analytic resources required to build and grow outstanding companies.
The company helps entrepreneurs establish a clear vision for long-term business goals and pragmatic action strategies to reach there. Dale Ventures serves clients worldwide.
Serial investor Dale W. Wood founded the VC firm in 2017. The Dale Ventures team operates across 7 localized offices in 3 regions – Americas, EMEA, Asia Pacific.
Dale Ventures follows the principles of value generation, honesty, ideation, and modernization. They co-partner with only the best to provide valuable crucial and tactical inputs to create and nurture great companies.
Dale Wood venture capitalist is still very active and works in the trenches with his team and partners every week!
Key Individuals: Dale W. Wood
Focused Industries: Finance, Real Estate, Technology & Media, Healthcare, Media
Benchmark Capital
Benchmark Capital is a San Francisco-based VC firm that was founded in 1995.
Benchmark Capital believes that great entrepreneurs transform the world for the better. The company has a reputation for taking risks with never before executed business ideas.
Since its establishment, Benchmark has invested in 250+ early-stage start-ups.
eBay is Benchmark’s most notable investment ($6.7 million). Other successful investments include Uber, Twitter, Instagram, Yelp, Discord, Zillow, and Dropbox.
Key Individuals: Peter Fenton, Chetan Puttagunta
Focused Industries: Communications, Enterprise Software, and Services, Semiconductors, Mobile Computing, Security, Consumer Services, Financial Services.
First Round Capital
First Round Capital provides investment funding to companies in the seed stage.
Founded in 2004, their mission is to foster a vibrant community of tech entrepreneurs and companies by helping founders build companies from scratch. The company tends to focus exclusively on start-ups based in the United States.
Instead of splitting angel, seed, and pre-seed funding into separate categories as most VC firms do, First Round Capital is interested in giving the same support across the board. The emphasis on the growth of portfolio companies up to 18 months.
First Round Capital’s list of portfolio companies includes GroupMe, 9GAG, Airlift, Altitude Learning, Abra, Hotel Tonight, and Blue Apron.
Key Individuals: Rob Hayes, Bill Trenchard, Chris Fralic.
Focused Industries: First Round Capital sticks to the rule of “not just one sector.”
Conclusion
A VC firm can help transform your start-up from an idea to a thriving enterprise with superstar potential.
Once you decide on a venture partner from this list, prepare a killer pitch that will be hard to say no to.
We will keep updating this list to ensure you get the most recent data and analysis.
