We looked at the investors with portfolio companies that had the greatest likelihood of raising a follow-on round and identified the composition of investors in those follow-ons.
“Smart Money” venture capital investors are investors with a strong record of portfolio company exits and return on their investment. But when startups pursue investments from these top-tier VCs, can they expect to see a follow-on round further down the round?
We used the CB Insights platform to examine the investment behavior of VCs on our smart money list, which we selected based on portfolio valuation and investment outcomes. We looked at the investors with portfolio companies that had the greatest likelihood of raising a follow-on round and identified the composition of investors in those follow-ons — what percentage were new investors and what percentage were smart money investors. We found that a notably high percentage of smart money companies’ follow-on rounds included other smart money investors, suggesting that this cohort invests heavily among each other’s portfolio companies.
Our smart money methodology led us to identify 24 venture capital firms that stand above the rest in terms of financial success. These are outlined at the bottom of this post, and include funds like Sequoia Capital, Benchmark, and Andreessen Horowitz, among 21 others.
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