Venture Capital Industry Profile

Companies in this industry invest capital in new business ventures. Major venture capital firms include Accel, Kleiner Perkins Caufield & Byers, New Enterprise Associates, and Sequoia Capital (all based in the US), as well as Amadeus Capital Partners (UK), Singulariteam and Viola Ventures (Israel), Globis Capital Partners (Japan), and Nexus Venture Partners (India).

Globally, venture capital investment exceeded $254 billion in 2018, up from $174 billion in 2017. The US is the global center for venture capital, followed by Asia and Europe. While China dominates VC investment in Asia, deal volume there is declining, according to KPMG's Venture Pulse. India and Israel are other growing markets for venture capital.

The US venture capital industry includes about 970 firms that had about $359 billion under management in 2017, up from $338 billion in 2016, according to the 2018 National Venture Capital Association Yearbook. After peaking in 2015, investment in venture-backed companies declined in 2016, but accelerated in 2017 to reach its highest level since the dot-com era.

COMPETITIVE LANDSCAPE

Demand is driven primarily by the pace of technological innovation and the number of companies created to commercialize new technologies. The profitability of individual companies depends on successfully choosing and managing a portfolio of investments. Large firms have advantages in attracting capital, developing expertise in multiple technology markets, and funding large deals. Small companies can compete effectively by concentrating on specific market sectors or ...