Why do VC firms lead deals and what does it mean for them, their companies and their LPs?
For one, VCs lead deals because they get to negotiate the price and terms of the investment. And since they’re confident enough in the company to consider leading its financing, they want to ensure that they are getting compensated in equal measure. Lead VC firms also typically place a partner on the Boards of their investments, allowing them to influence critical business decisions immediately and down the road (considering these individuals are often experts in the field their portfolio companies operate in, this is a huge benefit to the startups). It’s also a matter of image. VCs want limited partners to know that they can—and do—generate their own investments, rather than “piggy-back” on other investors’ deals.
That last point is particularly important. How well (or often) a VC firm generates its own deals (leads its investments) is a key measurement of its success—as well as the success of its lead partners—and a big factor in how easily it can raise funds from LPs. Leading an investment is a lot of work. From negotiating terms and handling all the documents to managing the rest of the investors involved and working actively with the company after the deal closes, lead investors are the ones who really make a given deal happen. So, which venture investors lead the highest percentage of their deals? Check out the rankings below listing the top investors by percentage of deals led, as well as total deals led.
Note: The rankings include venture capital firms that have completed at least 150 investments since 2010. All data is for investments within the timeframe.
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