Within finance, graduates can take plenty of career routes, from accounting to financial management. However, venture capital remains one of the top destinations for students who want to work in a dynamic, fast-paced environment.
Among the prestigious M7 business schools, venture capital is one of the most popular routes for MBA graduates. Up to 12% of graduating students from these schools opt for a career at a VC firm, making it one of the most popular finance sectors.
A career in venture capital offers many of the traditional benefits of a financial job, including high compensation and the chance to work with exciting companies. It’s also a draw for students who want to support growing companies in emerging areas like fintech, healthcare tech, and sustainability.
You'll have plenty of choice if you’re looking to join a venture capital firm after your business degree—there are thousands of VC firms in the US alone, not to mention companies in Europe and Asia. But what are the best venture capital firms to work for?
The HEC Paris—Dow Jones Venture Capital (VC) Performance Ranking lists the top 20 highest performing venture capital firms using data from 415 global private equity firms and the private equity database, Prequin.
Researchers narrowed the sample by selecting only firms that documented considerable performance (over US$100 million) from funds raised between 2009 and 2018, creating a list of the best performing venture capital firms.
If you're looking to launch your career at one of the industry's top performers, these are the companies ranked as the best venture capital firms to work for.
US firms dominate the VC ranking
As you might expect, US VC firms represent a large majority of the ranking. In fact, 75% of firms on the list are US-based, confirming that the US remains the central hub for the best venture capital firms to work for.
That includes the top-performing VC overall, IA Ventures. This New York-based VC firm has a performance ranking significantly higher than the second-best-performing VC on the ranking, Blackbird.
Among US firms, there is some variation in portfolios. IA Ventures is a seed-stage venture focusing on fintech and software companies, while other US firms on the list vary between seed-stage and growth-stage funds.
Other US companies making it into the top five best venture capital firms—IA Ventures, Group 11, and Anthos Capital—all focus on tech and fintech, suggesting significant growth for startups in these industries.
Promising growth from global VC firms
But US VCs aren’t the only ones reporting strong performance from their funds. Some of the best venture capital firms to work for are located outside of the US, according to the ranking.
In total, five non-US VC firms make the list, from Australia, Israel, Belgium, India, and Indonesia.
These global VC firms are also outperforming mature US-based VCs. While 15 of the 20 ranked firms are from the US, nine of these firms sit in positions 11 to 20. Only one global VC makes the lower half of the ranking: Alpha JWC Ventures in Indonesia.
The rankings may signify a move away from US dominance in the financial industry, with each global VC firm outperforming the largest venture capital firms. For example, Australian and New Zealand firm Blackbird was only founded in 2012 and has since built a portfolio totalling over US$4.5 billion.
Similarly, Gillot Capital Partners from Israel, founded in 2011, is one of the largest venture capital firms in the Middle East. Specializing in tech, particularly cybersecurity, cloud, and SaaS companies, the firm has built funds encompassing US$500 million.
Small firms outperform mature VCs
Another surprising insight from the ranking of the top venture capital firms is the appearance of several small and young VCs from the US and abroad. These smaller firms often outperform the largest venture capital firms, giving them a strong case to be some of the best venture capital firms to work for today.
We’ve already mentioned Bluebird and Gillot Capital Partners, but the firm at the top of the ranking, IA Ventures, is also considered a relatively new VC fund. It was founded in 2010. Many other younger VCs, established after 2012, have also entered the top 10 positions, including Oak HC/FT Partners, March Capital Partners, and SmartFin.
By contrast, the most mature venture capital funds appear to be delivering smaller returns compared to younger funds. These include Summit Partners, Battery Ventures, and Scale Ventures Partners, all founded on or before 2000 and sitting in positions 15 to 20 in the ranking.
“In terms of size and vintage, the analysis shows a notable split at the top of the rankings,” adds Professor Oliver Gottschalg. “This surprising data suggests that these new VC firms deliver the greatest returns, followed by a group of stellar incumbents who have grown in size over the years while still outperforming the average VC.”
Fintech well-represented in VC funds
Understandably, many of the VC firms in the ranking specialize in investments in technology startups. However a strong focus towards fintech in the top 10 suggests these specialists are among the best venture capital firms to work for.
IA Ventures, Group 11, Oak HC/FT Partners, and G Squared all focus their investment on emerging fintech startups, among other tech-focused companies. Incidentally, these firms are all from the US and occupy positions 1 to 7 in the ranking.
The rankings also cement the move towards ‘founder-first’ VC funds—firms prioritizing investment in entrepreneurs rather than companies. Number-two ranked Bluebird specifically prioritizes investment in “early-stage founders” instead of sectors or stages. Similarly, number 13 ranked General Catalyst Partners, founded in 2000, also specifies an interest in building lifelong investment in founders.
Whether you opt for a small-scale firm specializing in seed stage funding, or a larger firm investing in growth stage companies, enrolling in a top business school degree can provide you with the skills, knowledge, and connections to help you take the next step in your journey.