Venture Capital Funding

My research team and I analyzed thousands of angel investments to identify who has backed the most US unicorns before they reached unicorn status. The Top 50 – David Morin (23): Co-created Facebook Platform; founded Slow Ventures – Peter Thiel (21): PayPal co-founder; first external Facebook investor; founded Founders Fund – Lee Linden (21): Founded Karma (acquired by Facebook); Managing Partner at Quiet Capital – David Sacks (20): Former PayPal COO; founded Yammer (acquired by Microsoft); founded Craft Ventures – Marc Benioff (19): Founder and CEO of Salesforce – Kevin Moore (19): President of KRM Interests with over 200 portfolio companies – Felix Shpilman (19): General Partner of Start Fund; early investor in Uber, Coinbase, and Instacart – Scott Belsky (18): Founder of Behance (acquired by Adobe); Adobe's Chief Product Officer – Nathaniel Turner (18): Co-founder of Flatiron Health (acquired by Roche for $2.1B) – Scott Banister (18): Co-founder of IronPort (acquired by Cisco); early advisor to PayPal – Paul Buchheit (17): Creator of Gmail; partner at Y Combinator – Jeremy Stoppelman (17): Co-founder and CEO of Yelp – Max Levchin (16): Co-founder of PayPal; founder and CEO of Affirm – Kevin Hartz (15): Co-founder of Eventbrite and Xoom; founder of A* Capital – Ron Conway (15): Founder of SV Angel; early investor in Google, Facebook, and Twitter – Shervin Pishevar (14): Co-founder of Sherpa Capital; early investor in Uber and Airbnb – Elad Gil (14): Former VP at Twitter; investor in Airbnb, Coinbase, and Stripe – Benjamin Ling (14): General Partner at Varia Ventures – Ashton Kutcher (13): Co-founder of A-Grade Investments and Sound Ventures – Kevin Colleran (13): One of the first 10 employees at Facebook; Managing Director at Slow Ventures – Andrew Frame (13): Founder and CEO of Citizen – Sam Altman (13): CEO of OpenAI; former president of Y Combinator – Jared Leto (12): Actor and investor in Uber, Airbnb, and Slack – Ullas Naik (12): Founder of Streamlined Ventures – Keith Rabois (12): General Partner at Founders Fund; co-founder of Opendoor – Tim Ferriss (12): Author and early-stage investor in Uber, Facebook, and Shopify – Joshua Buckley (11): Runs angel investment firm Buckley Ventures – Garrett Camp (11): Co-founder of Uber and StumbleUpon – Ilya Sukhar (11): Co-founder of Parse (acquired by Facebook); General Partner at Matrix – Raymond Tonsing (11): Founder of Caffeinated Capital – Charles Songhurst (11): Former head of corporate strategy at Microsoft – Daniel Curran (11): CEO& Founder @ CustEx – Timothy Draper (11): Founder of DFJ and Draper Associates

My friend raised $100 million from well-known VCs and is shutting the company down in the next couple of weeks. I met with him to learn what went wrong. He asked me to share his recent startup experience with my LinkedIn community, hoping it could benefit other founders. His biggest regret on his nearly 7-year journey was accepting a significantly overvalued Series A round. He raised a large financing round at a massive valuation from well-known VCs, which generated significant media buzz. This was the kind of moment many founders post about and celebrate. He had many term sheets and took the one with the largest valuation. Turns out, that inflated valuation from his round created immense pressure and set expectations so high that securing crucial follow-on funding became impossible. Then a few product delays hit. A key hire fell through. Normal startup turbulence. Follow-on funding dried up. Morale dropped. The story shifted. He also had many early VCs on his cap table that were chasing markups. Their playbook was simple: inject capital, hype the company, and flip it to the next investor at a higher valuation. The lesson? Valuation is not validation. It’s a bet. And if it’s misaligned with reality, it can sink even the most promising company. A more grounded valuation is the key to sustainable growth and navigating the long, unpredictable startup journey. Raise what you need. From people you trust. Build a good foundation to get through any ups and downs. #founder #funding #investing #vc #venturecapital #entrepreneur #startup

Just two weeks after Marc Andreessen declared that venture capital is a “timeless” profession probably immune to AI disruption, Nik Storonsky, co-founder of Revolut is proving otherwise with QuantumLight, a $250 million AI-driven VC fund that’s already making waves. QuantumLight leverages a proprietary AI system named Aleph to analyze billions of data points, identifying high-potential startups without relying on human intuition. Storonsky, frustrated by traditional VCs’ crowd mentality, aims to eliminate bias and bring precision to investment decisions. While Andreessen argues that venture capital requires irreplaceable human creativity, the success of QuantumLight suggests that AI can not only participate in but potentially outperform traditional methods. In a previous post, I highlighted the emergence of AI angel investors like No Cap signaling a shift in the investment landscape. This news about QuantumLight further challenges the notion that venture capital is beyond AI’s reach. Will VC remain a gated, relationship-driven, “who you know” industry, reserved for a select few? Will AI change this? What are your thoughts? What matters more to an investor? The hard data, or soft things that are invisible to the “eyes of AI”? #AI #VentureCapital #QuantumLight #MarcAndreessen #NikStoronsky #Innovation #StartupInvesting #IncludedVC

Every Stage of Fundraising Explained Every month I meet with founders who get confused about when to raise money and how much equity to give up. and if I'm being honest, most entrepreneurs jump into fundraising without understanding what investors expect at each stage. So you may be wondering what each stage actually looks like? Here they are: ➡️ PRE-SEED STAGE This is where it all starts...turning ideas into viable concepts. You're looking at $10K to $250K in funding, typically giving up 5% to 20% equity. The timeline is short, maybe 3 to 6 months with a tiny team of 1 to 3 people. Your funding usually comes from founders, friends and family, angel investors, or accelerators. At this stage, you're just proving the concept has legs. ➡️ SEED STAGE Now we're building the foundation and proving the business model works. Companies use seed funding to develop their minimum viable product, conduct market research, and establish initial market fit. You're looking at $250K to $2M over 8 to 18 months. What I love about this stage is you're expanding your team to 3 to 10 people and working with angel investors, seed VCs, and micro VCs. ➡️ SERIES A This is where things get serious...scaling the business model. Series A funding optimizes your business model and scales user acquisition. You need a clear monetization strategy and growing user base. We're talking $2M to $15M over 12 to 24 months. Investors want to see $100K+ monthly revenue, 20%+ monthly growth, and strong unit economics. That's pretty amazing when you think about the metrics required. ➡️ SERIES B Market expansion and growth become the focus here. Series B funding scales the business beyond the initial market. Companies expand geographically, develop new products, or enter adjacent markets. You're raising $10M to $50M with a team of 25 to 100 people. But my take? This stage is where tier 1 VCs, growth equity, and private equity really start paying attention. ➡️ SERIES C+ Well...now you're preparing for exit or global domination. Later stage funding rounds for companies preparing for IPO, acquisition, or international expansion. The focus shifts to market leadership and operational efficiency. We're talking $30M to $100M+ with teams over 100 people. I know I know...the equity given up drops to 5% to 15% because your valuation is much higher. ➡️ IPO / EXIT The final stage where companies either go public or get acquired. Companies at this level are unicorns with $1B+ valuations and $100M+ annual revenue. The entire process typically takes 5 to 10 years total to reach market leader status. Investment banks, public markets, and strategic acquirers are your funding sources at this point. === I had a lot of fun putting this breakdown together...and it really just shows how each funding stage has specific goals and expectations. What has your experience been with fundraising? Which stage are you currently in? Let me know in the comments below 👇

I have worked in VC for 10 yrs learning how to select, manage and successfully exit early stage technology companies. Here is a list of VC specific accounting & legal terms that investors expect tech founders to know/measure in their businesses 1. Burn Rate: The rate at which a startup is spending its capital, typically on operating expenses, before it becomes profitable. 2. Runway: The estimated amount of time a startup can operate before running out of funds based on its current burn rate and available capital. 3. CAC (Customer Acquisition Cost): The cost a startup incurs to acquire a new customer, including marketing and sales expenses. 4. CLTV (Customer Lifetime Value): The estimated total revenue a startup expects to generate from a customer throughout their relationship with the company. 5. Churn Rate: The percentage of customers who stop using a product or service within a specified period, often measured monthly or annually. 6. LTV/CAC Ratio: The ratio of Customer Lifetime Value to Customer Acquisition Cost, used to assess the efficiency and sustainability of customer acquisition efforts. 7. MRR (Monthly Recurring Revenue): The total revenue generated from subscription-based products or services on a monthly basis. 8. ARR (Annual Recurring Revenue): The total revenue generated from subscription-based products or services on an annual basis. 9. CAC Payback Period: The time it takes for a startup to recoup the cost of acquiring a customer through the customer's subscription or purchases. 10. Gross Margin: The percentage of revenue remaining after subtracting the cost of goods sold (COGS), indicating a startup's profitability. 11. Run Rate: An extrapolation of a startup's current financial performance to estimate its annual performance. 12. GMV (Gross Merchandise Value): The total value of goods or services sold on a platform or marketplace, excluding fees and discounts. 13. Liquidity Event: An event, such as an acquisition or IPO, that provides investors with the opportunity to realize a return on their investment. 14. Dilution: The reduction in ownership percentage of existing investors or founders when new equity is issued, such as in subsequent funding rounds. 15. Liquidation Preference: A clause in a VC investment agreement that specifies the order in which investors receive proceeds in the event of a liquidation or exit.

Total money raised by US VC funds was over $65 billion this year, with 9 VC firms raising more than 50% of that amount. The top three VC funds, Andreessen Horowitz, General Catalyst, and Thrive Capital collectively raised a staggering c.$19 billion, about 29% of the total funds. The top 30 VC funds raised $49 billion (75%) of the total funds raised, while emerging funds raised $9.1 billion (14%) and other experienced managers raised $7.5 billion (11%), according to PitchBook. An interesting trend is the decline in funds raised by emerging VC firms. In 2019, emerging funds secured 38% of total funds raised, compared to 28% for 2024, a decline of 10%. This decline can be attributed to various factors, including a shift from some investors towards well-established VC funds and a challenging fundraising environment that favoured these established funds. Additionally, there has been an increase in the number of mega funds, which are almost exclusive to the largest VC funds. This trend is partly attributable to the AI wave, which has created a boom in AI startups that require large cheque sizes to support their high capital requirements. #venturecapital #innovation #technology #startups #fundraising

A question which I get asked often: “Why does a VC firm which invests $1M into a startup end up raising a $300M+ fund?” This is a fair question & mostly a misconception because of how social media only focuses on the initial investment made by a VC fund… You must have heard about Accel’s $1M investment into Flipkart. And, then you’ve read the news that Accel made $1.5bn+ on this investment. Except that the news forgot to highlight that Accel invested an additional $50M to $100M into the company over subsequent rounds. Most VC funds have something called a ‘reserve’ allocation i.e. a portion of the invested corpus which gets invested into existing portfolio companies which are performing. 1️⃣ Each time a company raises a new financing round, new shares get issued to incoming investors. 🤝 Hence, if you don’t add capital in the new round, your % ownership in the company as an investor reduces over time. Your returns as a VC = % ownership a exit * Valuation / Market Cap at exit 2️⃣ Also, at each successive round (in theory), the business gets further de-risked (longer track record, fewer unknowns, more data etc). 💡 Therefore, investing (more) money in later rounds should be a better risk adjusted return. Typically, later stage rounds (e.g. Series A etc) have enough room for an existing investor to write a larger cheque too (double benefit: lower risk & more info on company) 3️⃣ Based on my own math’s 📊 Accel’s $1M initial cheque into Swiggy is worth $200M at IPO - The remaining ~$300M comes from the $14M to $19M in additional capital (’reserves’) which Accel invested in 6 subsequent rounds ➡️i.e. on an absolute basis, the ‘reserves’ outperformed the initial cheque 4️⃣ Ideally, the VC should return X3 to X5 or more of the LPs money (e.g. $300M). And, the tools to do so is a portfolio strategy + reserve strategy (a) Portfolio: Get into 25-40 companies with a small cheque (e.g. $1M) . > 50% of them won’t make it. (b) Reserve: As you saw in (3), the investor needs to ‘back the truck’ into 3-5 companies ($15M to $25M in each). Chances are one or more of these won’t make it! 5️⃣ To help you understand how reserves, dilution etc impacts the absolute returns, I’ve created a simple working example on Google Sheets At a ‘deal’ (i.e. single company) level, investing more money into a winner, can easily x2 overall returns At the portfolio level, the reserves can drive more $$ returns than the initial cheques 🧠Remember: The partners are compensated for $ returns — therefore, even if a x100 on the $1M entry cheque sounds cool, the x10 on the next $15M invested drives more performance fees / bonus for the partners. The sheet is linked in the comments w/ instructions on how to use it; feel free to download & use. ➡️VC is an ‘absolute dollar returns’ asset class i.e. where the partners decide to invest the reserve funds drives a sizeable part of the overall fund performance & their personal pay cheque. #startups #india #venturecapital

The 8 Part Test Before Taking a VC Term Sheet: #1. Talk to as many founders they’ve invested in as you can. Do reference checks. You may hear 1 or 2 rough stories, bear that in mind. In fact, expect that. Don’t expect 100% support, at least not for folks at big funds that write big checks and serve on boards. But talk to as many as you can, at least a few. And listen. And ask how supportive they were vs. the others. You will hear advice from a lot of folks to talk to founders that failed, to see how the VCs supported them. I think that’s fine. But the flaw in that advice is that failures are messy. You get more value IMHO talking to founders that built something that got to some scale at least. #2. Ask how many investments they write second and third checks into. VCs that don’t write second checks are less valuable. Their financial contributions will be mostly over after the initial check. At least know the answer here. All things being equal, it’s better to take money from a VC that often writes second and third checks. You probably will need one. #3. See how pushy they are around control. If they insist on a board seat for < 10% ownership, that’s a flag. If they want control disproportionate to the cap table, that’s a flag. #4. Ask if they’ll still be there in 10 years, at the same fund. Just ask.  If you don’t get a clear answer, they may not be. It’s definitely a bummer if a VC doesn’t stay at the firm that invested in you. Ask. And realize that if they don’t run the place, and/or aren’t a “managing general partner” or something similar — there’s a decent chance they aren’t at the firm as long as you’re at the helm as CEO. #5. Ask what’s the toughest founder-VC experience they’ve been through, and what they learned from it. They are always frictions. See what they’ve learned from it. #6. Ask about some of their stories of bringing in outside CEOs to run their startups. See how it happened, and why, and how they think about it. Bringing in an outside CEO at the growth stage is a complex topic, with complex answers. Good to know how they think about it. Personally, I’ve never done it. I’m Team Founder or bust. #7. Ask what their worst investment was, and why. They know. Let them talk about it for a while. Don’t interrupt or stop them :). You’ll learn a lot. #8. Ask what CEO they’ve invested in that they respect the most. This is what they’ll be looking for from you.  If you don’t like what you hear, it may not be a great fit. If you have options.

Sanofi Bets Big on Biotech and Digital Health With $625M Boost, Taking Venture Arm to $1.4B>> 💊 Sanofi is putting another $625 million into its venture arm, Sanofi Ventures, bringing total funds under management to more than $1.4 billion 💊 The fund will back early-stage biotech and digital health companies, with a focus on Sanofi’s core areas of immunology, rare diseases, neurology and vaccines 💊 Since 2012, Sanofi Ventures has invested over $800 million across 70+ companies, with recent exits worth $3.25 billion (@Aliada Therapeutics to AbbVie, Escient to Incyte, Icosovax to AstraZeneca) 💊 It invests at every stage, from early seed funding to just before IPO, and often takes board seats to help guide company growth 💊 With traditional VCs pulling back in a tougher market, Sanofi is stepping in to lead or co-lead rounds, giving it early access to emerging science and future pipeline opportunities 💊 This year alone, Sanofi Ventures has backed 11 companies, including SpliceBio (gene therapy), Character Bio (ophthalmology) and Draig Therapeutics (neurology) 💬 I’ve tracked Sanofi Ventures on my Digital Health market maps for years, and they’ve backed standout names like Click Therapeutics, Inc., Omada Health, Evidation, Medisafe® and Voluntis #digitalhealth #ai #pharma

'How do I calculate my valuation if I'm not generating revenue yet?' 🤷🏼♂ This is a question I often get asked by early-stage founders, and I understand why. Low valuations impact cap tables for future fundraising rounds; high valuations can put investors off or lead to 'down rounds' in the future. Here are two things to consider when thinking about a pre-seed or seed-stage valuation: 👉🏼 Cap table structure: Investors widely accept that active founding teams should have a minimum of 50% equity at the Series A stage. With this in mind, modelling the dilution of future investment rounds will help founders view how much dilution they can afford to take on each investment round. With a robust capital allocation plan, founders can take the target raise amount, apply a dilution range of 15% - 25%, and land on a rough valuation figure. 👉🏼 Exit potential: Calculating potential exit multiples in a specific sector or vertical can be done by researching enterprise value-to-revenue (EV/R) multiples. EV/R is a measure of the value of a stock that compares a company's enterprise value to its revenue. Understanding these multiples allows a founder to consider the exit potential of their start-up which, in turn, allows them to consider what equity holding an investor would need to achieve their target return (this varies greatly between investors). Pulling in some data here (shoutout to the king of insights, Peter Walker, for this beautiful graphic), to show the median equity amounts sold to investors by round. Valuations can be a friction point for investors and founders. Ultimately, both parties need to focus on value creation and supporting the other to achieve a mutually desirable outcome for the start-up. #founders #vc #startup #investment