We briefly discussed venture capital in our previous blog which looked at private equity investing. Venture Capital is another sector of private equity investing that primarily focuses on investing in early-stage to growth-stage companies. It is the investment given to startup companies that are unable to receive funds through the traditional methods of issuing debt. It is typically a higher-risk investment, but it can provide tremendous returns on investment if the company succeeds. There have been many venture capitalists who have been the driving force behind successful startups like Groupon, LinkedIn, Skype, Youtube and Paypal amongst others. Take a look at some of the most successful and wealthiest venture capitalists.
Reid Hoffman has been called “the most connected person in Silicon Valley.” Hoffman has invested in almost every successful startup whether it was personally or through Greylock Partners. There is a strong chance that if a company involves the internet, social networking, online marketplaces or social gaming, Hoffman either invested in it or chose not to invest in the company. Some of the startups he provided venture capital funding to include Groupon, Airbnb, Flickr, Paypal, and Facebook. Hoffman is also the co-founder of LinkedIn which he helped found in 2003. His successful endeavors have allowed his net worth to be around $1.8 billion.
In 1998, Peter Thiel helped co-found Paypal and served as its Chairman and CEO until 2002 with the eBay acquisition. He has also started the Clarium Capital Management and co-founded the software company Palantir Technologies. He was the first outside investor in Facebook to which he made $500,000 investment back in 2004. Facebook is now worth about $2.5 billion. Peter Thiel also started an interesting mentorship program called The Thiel Fellowship which offers the winners of the fellowship $100,000 to start a business along with his mentorship for two years.
Some of the companies Peter Fenton’s investments made a footprint are Twitter, JBoss, Zimbra, and FriendFeed amongst others. Fenton also worked as a partner at Accel Partners before joining Benchmark Capital in 2006. He currently serves on the board for about twelve different companies that include Yelp and Twitter.
Kevin Efrusy was already a successful entrepreneur on his own before he entered the world of venture capital investing. He started his own company, Corio which was a software-as-a-service company. He sold the company to IBM in 2005. He also started IronPlanet which is an online marketplace for heavy equipment. The companies he has invested in range from Groupon to Metacafe and even Facebook.