Which Investors Are Best At Finding Future Unicorns Early?

Venture capital investing is a game of home runs. VCs are always looking for the investment that can “return the fund” and make up for all their losses — and then some.

For this reason, it’s not only important to invest in high-performing companies, but also to invest in them early. Getting involved early on generally means greater equity, control, and eventual returns.

Using CB Insights data and our real-time unicorn tracker, we dug into investors’ portfolios to see which have backed the most current unicorns when they were just taking off (as of Q2’21). 

Note: we define “early stage” as seed and Series A rounds. Please click to enlarge. 

Smart Money investor Benchmark leads in efficiency for early-stage unicorn investments, with an 80% efficiency rate. This means that of the 10 unicorns in its portfolio, it backed 8 of them at the early stage.

To point to an example of one of its successful early-stage bets, Benchmark participated in chat platform Discord’s Series A round in 2013, when the company was valued at $23M. As of December 2020, Discord was valued at $7B.

(We go deeper into the early-stage bets from Smart Money VCs like Benchmark here.)

In terms of unicorn efficiency, Benchmark is followed by US-based Social Capital (75%) and China-based 5Y Capital (71%). Examples of early-stage bets from these investors include:

• Greenlight: Social Capital backed Greenlight’s seed round in 2017, when it was valued at $23M. The company, which offers smart debit cards for kids, has since grown its valuation by 100x, to reach $2.3B as of April 2021.
• We Doctor: 5Y Capital backed this healthcare app’s Series A in 2012. As of February 2021, We Doctor is valued at $7B.

Rounding out the top 10 most efficient unicorn investors are: Union Square Ventures (67% efficiency), FundersClub (64%), FirstMark Capital (64%), Greycroft (60%), First Round Capital (60%), Venrock (60%), and Khosla Ventures (59%).

For more unicorn investor analysis — including which investors have backed the most unicorns across funding stages — dig into the full report here.