Data on VC Investments

Goals

Identify statistical data on recent returns on series C investments to help build content for a pitch deck for a new fund.

Early Findings

Average Returns for Series C Investments

  • Patrick Mathieson, a venture investor at Toba Capital estimates that a "good" deal ROI for a Series C investment is 2.5 times the investment. He also notes that the target failure is about 25%.
  • The VC blog VC Razor estimates that Series C returns are usually 3.3 times the investment.
  • The average amount invested in Series C funding is around $50 million and the average equity stake is 15-30%.

Recent Series C Rounds

  • KnowBe4, a cybersecurity training company, raised $50 million in a Series C round in March 2019.
  • Lemonade, a full-stack insurance company, raised $120 million in its Series C round in December 2017.
  • Offerpad, a residential real estate company, raised $565 million in a Series C round in March 2019.
  • Chehaoduo, a consumer-to-consumer used car marketplace company, raised $980 million in Series C funding in October 2018.
  • Zynga, One Kings Lane, and Gilt are startups that fell apart shortly after series C funding.

Other Relevant Information

  • Lead investors at the Series C stage tend to be private equity firms and investment banks, which is unusual at earlier stages.
  • Because of the type of investors typically involved in later stage funding, these rounds are sometimes labeled as "private equity."
  • Some Series C investors include venture capital firms like New Enterprise Associates, Accel, Sequoia Capital, Kleiner Perkins, and Bessemer Venture Partners.

Proposed next steps:

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Based on our preliminary research, we found limited information on the returns companies typically receive from Series C investments. However, we could continue our research by identifying companies with successful Series C rounds in the past five years, their lead investors, and search for press releases and news articles detailing the returns that the lead investors received. We could identify 4-5 example companies.
Alternatively, we could focus on the series C investments made by private equity firms and investment banks. We could search for the average returns received by these kinds of investors, and identify 3-4 examples of a startup receiving late-stage funding from a private equity firm or investment bank.