I was listening to the above Episode 7 of the ‘This Week in Venture Capital’ podcast today, where Mark Suster interviews Dana Settle, a partner with Greycroft Partners. See podcast summary here.
At the 8:35 minute mark, Mark and Dana discuss a new venture capital market segmenting trend where different funds are available to startups /ventures at different stages of their growth cycle. In this way VC’s can better focus on the different issues that affect startups at various stages.
I found this intriguing. I summarize the segments they discussed below:
Note: [CB] references below link to more info from CrunchBase on the applicable fund and its recent financings.
Super Angel / Seed Funds
- Funds with $25 million or less in capital
- Write cheques from $100K to $500K
- Funding pre-product in some instances
- Representative Firms: Founder Collective on east Coast, Dave McClure’s Felicity Ventures [CB], Jeff Clavier’s Softech [CB]. On west coast, CrossCut [CB] and Rincon Venture Partners [CB].
Early Stage Funds
- Smaller than traditional VC
- Funds with $50 to $125 million in capital
- Write cheques from $750K to $1 million
- They like to see a product launch with first cracks at revenue generation to prove the idea can be monetized
- Representative Firms: First Round Capital [CB], Greycroft Partners [CB], True Ventures [CB]
A Round Funds
- Funds with ~ $200 million in capital
- Write cheques from $2M to $3M
- Representative Firms: Foundry Group [CB], Union Square Ventures [CB], GRP Partners [CB]
B Round Funds (Traditional Growth/Equity Firms)
- Funds with ~ $400 million in capital
- Write cheques in the $10M range
- Representative Firms: Light Speed [CB], Battery Ventures [CB], DAG Ventures [CB], Matrix [CB], Polaris Venture Partners [CB]
Growth Equity Funds
(not discussed in podcast but mentioned in the podcast summary)
- Larger funds writing still larger cheques
- Representative Firms: General Atlantic [CB], Insight Venture Partners [CB], Summit Partners [CB], Francisco Partners [CB]
Of course few venture funds fall absolutely in any one of the above categories.
