Table of Contents

* List of Top VC Funds?

* What is VC, Venture Capitalist, VC fund?

* VC in Detail

* Various Stages of VC Investment

* Sources of Capital

* How to Position Yourself for a VC Job

* Sample VC Interview Questions & Strategy

VC - Related Articles

#1 - Prototype: Try, Try Again, or Maybe Not
William H. Davidow, a venture capitalist, says he would want to know why an entrepreneur’s last deal failed “and what the person learned from it.”

#2 - John Doerr's Start-up Manual
If you could ask only one person for advice about starting a company or joining a startup, chances are you'd pick John Doerr.

#3 - BCG - 7 Common Reasons CEOs Fail
Running a lean operation at VC is a must. Here's a study about how staggering 58% of new executives hired from the outside fail in their new position within 18 months.

#4 - Pros of Planting Start-ups in Smaller Cities
Bigger isn't always better when it comes to selecting a place to start a company.

#5 - Ultimate VC Job (Google VC)
jb32's post - Google's venture fund

#6 - Venture capital suffering from IPO, acquisition drought
Lack of M&A or IPO activity in VC world due to economy

#7 - VC Overview
Reuters Venture Capital Overview

#8 - Start-Up Gets Course in Survival
Lesson in survival from Sequoia Capital

#9 - VC Confidence Creeps Back
Isa's Article - VC's seeing signs of hope
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This will be very interesting.

VC in Detail

VC firms are buy-side capital firms that control a fund/pool of money to spend on buying an equity interest or assets of operating companies.

With venture capital you can sometimes obtain large quantities of money, and this money can help businesses with big start-up expenses or businesses that want to grow very quickly.

VC firms have many ways to cash out. However, 2 preferred ways to cash out are;

1) IPOs
2) Sale to other companies (usually bigger corporations)

However, due to the current state of the economy, IPO market has dried up. Many corporations are reducing their plans in VC investment/purchase to some degree.
However, appetite for investment/purchase in companies specializing in software, semiconductors, bioinformatics, biotech, medical devices, and security technologies are steady even in dismal economy. (as of March 2009)

Typically the VC will invest the entire fund and then anticipate that all of the investments it made will liquidate in few years. (3 to 7 yrs???) That is, the VC expects each of the start-up it invested in to either go public or to be acquired by another company. In either case, the cash in-flows from the IPO or sale to another company lets the VC firm to cash out and place the proceeds back into the fund. When the whole process is over, the goal is to have more money than the original investment amount in the fund. The fund is then reimbursed back to the investors based on the amount each one originally invested.

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Sources of Capital


You often read about VCs funding Dot Com companies, and they fund all sorts of other ventures as well. The traditional approach is for a VC firm to open a fund. A fund is a pool of money that the VC firm will invest in start-ups. The VC gathers money from wealthy individuals and from companies, pension funds, etc that have money which investors wish to invest. The VC will raise a fixed amount of money in the fund.

Capital is mostly derived from pension funds (set aside by corporations for employee retirement etc). Other sources include endowments of non–profit institutions (universities, museums, foundations, insurance companies, banks, wealthy individuals, and corporations).

Major source of money is from pension funds' "alternative investment" portfolio. Small portion of total pension fund (between 5-10%) is allocated to "alternative investment" portfolio in order to diversify its investment. Pension fund investment managers need to invest in a way that the pension funds' values will be large enough to cover the needs of the client corporations and other institutions. To maximize return and minimize risk, the pension money is invested in many places such as stocks, bonds, currencies, real estate and “alternative investments". Typical expected ROI on "alternative investment" portfolio is about 15-30%. However, this high ROI is associated with bigger risk compared to stocks, bonds, currencies, and other type of investments.

Recently, PE firms increased their investment in VC funds. Some are even investing directly into start-up companies.

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List of Top VC Firms

A - K
Atlas Venture
Located: Waltham, MA
Founded: 1980
Partners / Directors: Barry Fidelman
Specialty: Technology and Life Sciences

Azione Capital
Located: Singapore
Founded: 2006
Partners / Directors: Nicholas Chan, Soon Choo Teck, Lee Keh Sai
Specialty: Interactive digital media, mobile communications, wireless technology, energy, maritime

Benchmark Capital
Located: Menlo Park, CA
Founded: 1995
Partners / Directors: Neel Das (executive officer)
Specialty: Technology & Financial Services

Bessemer Venture Partners
Located: Menlo Park, CA; Larchmont, NY; Boston, MA; Herzliya, Israel; Mumbai, India;
Founded: 1911
Partners / Directors: David Cowan, Rob Chandra, Rob Stavis, Ed Colloton, Robert Goodman (managing partners)
Specialty: Technology & Services

Canaan Partners
Located: Menlo Park, CA; Westport, CT; Gurgaon, India; Herzliya, Israel
Founded: 1987
Partners / Directors: Eric Young, Deepak Kamra, John Balen, Maha Ibrahim, Brent Ahrens, Wende Hutton, Stephen Bloch (general partners)
Specialty: Technology and Healthcare

Clearstone Venture Partners
Located: Santa Monica, CA; Menlo Park, CA; Mumbai, India
Founded: 1998
Partners / Directors: Bill Elkus, Jim Armstrong, Erik Lassila, William Quigley, Sumant Mandal (managing directors)
Specialty: Internet, consumer, communications, software

Draper Fisher Jurvetson
Located: Menlo Park, CA
Founded: 1985
Partners / Directors: Timothy C. Draper
Specialty: Technology and Technology Services

Enterprise Partners
Located: San Diego, CA
Founded: 1985
Partners / Directors: Jim Berglund, Bob Conn, PhD, Carl Eibl, Drew Senyei, Kleanthis Xanthopoulos, PhD (managing directors)
Specialty: Technology and Life Sciences

Fidelity Ventures
Located: Boston, MA
Founded: 1970
Partners / Directors: Rob Ketterson
Specialty: Information Technology

Highland Capital Partners
Located: Boston, MA; Menlo Park, CA; Geneva Switzerland and Shanghai China
Founded: 1988
Partners / Directors: Sean Dalton, Bob Davis, Bob Higgins, Paul Maeder, Dan Nova
Specialty: Consumer, Healthcare, Info & Comm Technology and Internet & Digital Media

Insight Venture Partners
Located: New York, NY
Founded: 1995
Partners / Directors: Larry Handen, Jeff Horing, Jeff Lieberman, Ben Levin, George McCulloch, Jerry Murdock, Deven Parekh, Peter Sobiloff, Mike Triplett
Specialty: Software and Internet

Kleiner, Perkins, Caufield & Byers
Located: Menlo Park, CA
Founded: 1972
Partners / Directors: Brook Byers
Specialty: Alternative energy, technology & Life Sciences

M - W
Mayfield Fund
Located: Menlo Park, CA
Founded: 1969
Partners / Directors: James Beck, Navin Chaddha, Yogen Dalal, Kevin Fong, Raj Kapoor, David Ladd, Allen Morgan, Janice Roberts, Robin Vasan (managing directors)
Specialty: Wireless, Consumer, Software, Semiconductors

New Enterprise Associates
Located: Menlo Park, CA; Baltimore, MD & Reston, VA
Founded: 1978
Partners / Directors: Peter Barris
Specialty: Information Technology and Healthcare

Oak Investment Partners
Located: Westport, CT; Palo Alto, CA; Minneapolis, MN
Founded: 1978
Partners / Directors: Bandel Carano, Ed Glassmeyer, Fred Harman, Ann Lamont (managing partners)
Specialty: Information Technology and Healthcare

Point Judith Capital
Located: Providence, RI
Founded: 2001
Partners / Directors: Sean Marsh, David Martirano, Gina Raimondo (general partners)
Specialty: Communications, Internet, Healthcare and Software


Quicksilver Ventures
Located: Saratoga, CA
Founded: 2001
Partners / Directors: Maury Domengeaux, Randall Meals, Steve Schlossareck (Managing Directors)
Specialty: Secondary Venture Capital (acquire existing corporate and venture portfolios). Investment Focus: Emerging Technologies such as Video and Imaging; Networking and Mobility; Data Management, Services and Security; Storage Components and Systems; Enterprise Applications

Scottish Equity Partners
Located: London, UK; Glasgow, Scotland
Founded: 1991
Partners / Directors: Calum Paterson (Managing Partner), Andrew Davison, Brian Kerr, Gary Le Sueur, Fearghal Ó Ríordaín, Stuart Paterson, David Sneddon, Richard Sparrow
Specialty: Information Technology, Healthcare and Energy technology

Sequoia Capital
Located: Menlo Park, CA
Founded: 1972
Partners / Directors: Kui Zhou (principal), Don Valentine (founder), Neil Shen (founding managing partner)
Specialty: Components, Systems, Software and Services

Sevin Rosen Funds
Located: Dallas, TX; Palo Alto, CA; Austin, TX; San Diego, CA
Founded: 1981
Partners / Directors: Jon Bayless, Steve Domenik, Steve Dow, Dave McLean, Al Schuele, Charles Phipps, John Jaggers, Jackie Kimzey, John Oxaal, Nick Sturiale (general partners)
Specialty: Technology

Sigma Partners
Located: Boston, MA; Menlo Park, CA; San Ramon, CA
Founded: 1984
Partners / Directors: Robert Davoli, Lawrence Finch, Gregory Gretsch, Clifford Haas, John Mandile, Mark Pine, Peter Solvik, Bob Spinner, Wade Woodson (managing directors)
Specialty: IT: Software, Hardware, Semiconductors

Village Ventures
Located: Williamstown, MA
Founded: 1999
Partners / Directors: Matt Harris, Bo Peabody
Specialty: consumer media and retail, health care and financial services

Wellington Partners Venture Capital
Located: Munich, Germany
Founded: 1991
Partners / Directors: Rolf Christof Dienst, Frank Böhnke
Specialty: Technology, Digital Media, Life Sciences
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Bschool - How to Position Yourself for a VC Job


Once you are in bschool, first thing you should do is to join VC clubs at your school. This will allow you to attend PE?VC related conferences, meetings, and workshops available exclusively to club members.

Once you get yourself familiarized with different types of VCs, you should check out which VC firms recruit at your school and typical candidates they look for.

East Coast VCs look for students with technical background with finance/accounting concentration or experience. West Coast VCs tend to look for students with plenty of experience under their belt with sharp operations background. (mainly because West Coast VCs are mainly from Silicon Valley - where operations management is in demand)

Then, take classes or acquire skills that VC firms look for:

1) Data Mining, Industry/Company Research - positions at VC firms will require you to do due diligence on a company or to do extensive research in certain market/industry. You must be able to find the right information you need and then extract the only the required/key information from all the data available in front of you.

2) One would need to give strategic advice to portfolio companies regarding HR related issues, technical analysis, execution, sales strategy, logistics & distribution, growth strategy, SWOT analysis and product mix.

3) If you work at a VC firm, you will get plenty of face time with various individuals. Theirfore, relationship management is everything and one's communication/socialization skills will be key to success.

4) One should be able to perform superb financial analysis. This requires an extended knowledge of accounting. Because you will invest in the start-ups in specific industry, you will need to be aware of latest industry trend and info in order to get the credibility that you need to do the job. You need to know the latest hot companies, top managers, the industry history, and the latest rumors and trends. This is required in order to give advice in competitive positioning, alliances and partnerships, and executive hiring.

5) If a VC firm is looking for operations managers, they value one's experience in Fortune 500 companies - especially rotational or managerial experience in areas such as marketing, finance, sales, and business development.

6) Trained Business Mind - this is required to make sound investment decisions. Deep rich
experience is less important than strong intuition, a curious mind, and vision.

Typical Backgrounds of VC Candidates:

1) MC or IB experience after undergrad.
2) Experienced professionals from Fortune 500 companies in areas related to the VC's specialty such as IT, healthcare, biotech, etc.

Very few VC firms hire undergrads. Otherwise, MBA grads with science/engineering undergrad degree are prime candidates for VCs. A strong candidate will have a winning personality, an analytical mind and keen business judgment. VC firms are tiny compared to most other
professional outfits. They are high-pressure partnerships where the alchemy of strong personalities becomes critical to the success of the firm. VC candidates often interview with every professional at a firm—and typically, everyone in the firm has veto power. Recruiting at VCs are not in large numbers as IB/MC. VC firms are small in headcount and employee turnover rate is relatively low.

To get interviews:

1) Use Bschool On Campus Recruiting
2) Networking or Use Your Own Contacts
3) Private Fellowships for Bschool Students

VC interviews are not tricky. Usually, there are no brainteasers or case questions. (if you can do GMAT Word Problems, then you will be fine) A VC interview is a chance for VCs to get a sense of you, the same way they do when meeting with Start-ups. That’s how VCs make investment decisions—by gut instinct. Hiring is no different.

The interviews are often very personal in nature. You may be asked questions about your family, your friends, your former co-workers and bosses, even your romantic relationships. The VC wants to know if the candidate can bear to work closely with them and depend on you while at work.

However, finance related VC interviews are completely different. Be prepared to answer questions about company strategy, investments that should be considered, or new directions
and paths to be taken. You should therefore do enough research to understand the corporation’s lines of business, current strategic direction and challenges that it faces.


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Start-Up Gets Course in Survival

In October, when Wall Street was already wallowing in the financial crisis, many in the technology industry still thought they might be insulated from the worst of it.

Sequoia Capital, the venture capital firm that backed Google, Yahoo and YouTube, scared them straight when it hastily gathered the chief executives of the 100 American companies in its portfolio for a stark wake-up call that rocked Silicon Valley as well as start-ups elsewhere.

http://www.nytimes.com/2009/04/08/techn ... ss&emc=rss
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Presentation courtesy of Bain San Francisco

wow fantastic post. thank you for the info

I have another list for VC

Tier 1
Accel Partners
Benchmark Capital
Charles River Ventures
Kleiner Perkins Caufield & Byers
Matrix Partners
Sequoia Capital

Tier 1.5
Alta Partners
Apax Ventures
Austin Ventures
Battery Ventures
Draper Fisher Jurvetson
New Enterprise Associates
Sevin Rosen
Summit Partners
Technology Crossover Ventures