Investor types

Venture capital firms

A venture capital firm manages closed-end funds that take minority equity stakes in early and growth-stage companies. This page sets out the size of the venture market, how firms deploy capital and what changed in 2025 and 2026.

What a venture capital firm is

A venture capital (VC) firm raises closed-end funds from limited partners (LPs) and invests them in minority equity stakes in young companies, from seed rounds to late-stage growth rounds. VC firms rarely take control and use little or no leverage. That distinguishes them from buyout managers, described on the page on private equity firms. VC returns are also distributed differently: a small number of very successful companies typically account for most of a fund's gains, while many investments return little or nothing.

VC firms also differ from corporate venture capital units, which invest a corporation's own balance sheet, often for strategic as well as financial reasons, rather than third-party LP capital. Wealthy families, including single family offices, also invest directly in venture rounds alongside VC firms.

Scale: global and by region

Global venture funding rebounded to US$469 billion in 2025, up 47% year on year, after two years of decline, according to CB Insights.¹ The number of deals fell 17% to 29,501, so more money went into fewer companies.¹

In the United States, the NVCA 2026 Yearbook records US$320 billion deployed across 15,352 deals in 2025.² US VC funds raised US$67 billion in 2025, the lowest in nine years.²

Europe recorded venture funding of approximately US$68 billion in 2025, up around 18%, on CB Insights data cited by the German private equity and venture capital association BVK in January 2026.³ On a different scope, measuring investment by European funds, Invest Europe recorded €20 billion of venture capital investment in 2025, 20% above the five-year average.⁴ Switzerland has its own venture managers, among them Lakestar in Zurich, listed in the examples table below.

Sub-types and stages

VC firms are usually defined by the stage at which they invest. Pre-seed and seed funds back companies at formation. Early-stage funds lead the first institutional rounds, usually called Series A and Series B. Growth and venture-growth funds write larger cheques into companies with established revenue, overlapping with growth equity. Many firms also specialise by sector, for example software, life sciences or climate technology, and the largest platforms run separate funds for each stage. Most VC firms are organised as partnerships or limited liability companies that manage a series of funds.

Source of capital and investment horizon

VC funds are financed by LP commitments, typically from pension funds, endowments and foundations, funds of funds, family offices, sovereign wealth funds and corporations. Horizons are long because companies take years to reach an exit by sale or listing, and life sciences and deep technology companies often take longer than software. Exit markets improved only partly in 2025: US VC exit value was US$217 billion, twice the 2024 level but still 27% of the 2021 peak.²

How venture capital firms invest

VC firms invest in rounds, often as a syndicate with a lead investor setting the terms and others following. They usually buy preferred shares, which carry rights such as a liquidation preference and protection against dilution, and they keep part of each fund in reserve to follow on in later rounds of their most successful companies. Some firms also buy existing shares from founders, early investors or employees.

Capital is highly concentrated. Mega-rounds of US$100 million or more rose 77% to 738 in 2025 and captured US$307 billion, or 65% of global venture funding.¹ Artificial intelligence dominates US deployment. AI companies took 65.4% of US deal value in 2025, up from 50.9% in 2024,² and 82.7% of US venture deal value through September 2026.⁵

Typical round sizes

Round sizes vary by stage. The global median early-stage deal size reached US$2.7 million in Q1 2025, according to CB Insights.⁶ In the United States, excluding mega-deals, about 14,865 deals averaged US$7.1 million in 2025 and totalled roughly US$105 billion.² At the other end, the five largest AI companies (OpenAI, CoreWeave, xAI, Anthropic and Databricks) raised nearly US$60 billion between them in 2025.²

How decisions are made and how long they take

Investment decisions are taken by the firm's partners on behalf of its funds. A company is usually introduced to an associate or partner, who carries out initial work on the market, the product, customer data and the founders. The company then presents to the partnership. If the partners agree, the firm issues a term sheet, usually with a period of exclusivity, and completes legal, technical and financial due diligence before the definitive documents are signed.

Activity levels give some indication of pace: CB Insights counted 213 deals by General Catalyst, 178 by Andreessen Horowitz and 139 by Sequoia in 2025.¹

What venture capital firms look for and why they decline

Because a few companies must return most of a fund, VC firms look for businesses that could become very large: a large addressable market, a product or technology that competitors cannot easily copy, fast revenue growth, sound unit economics and a strong founding team. They commonly decline companies whose market is too small, whose advantage is easily replicated, whose cost of acquiring customers is high relative to the revenue each customer brings or whose shareholder register leaves too little equity with the people running the business.

The data show where capital has gone in 2025 and 2026: towards AI, towards large rounds and towards a small number of companies. Founders outside these areas meet a narrower market, with deal counts falling even as total funding rose.¹

Regulation and governance

VC managers in the UK and the European Union fall within the alternative investment fund managers regime. In the European Union, qualifying funds may also use the European Venture Capital Fund (EuVECA) label, which carries a marketing passport across the Union. The label was originally limited to managers below the AIFMD size threshold; Regulation (EU) 2017/1991 opened it to managers authorised under the full AIFMD.⁷ In Switzerland, managers of collective investment schemes must be authorised by FINMA under the Financial Institutions Act.⁸

Regulation also shapes the LP base: under the Basel III framework, banks that invest in venture capital equity face a 400% risk weight, according to the Basel Committee's December 2017 standard.⁹ Fund governance is set by the limited partnership agreement between the firm and its LPs.

Trends in 2025 and 2026

US venture deployment in 2026 exceeded all previous years. US VC deal value reached US$515.8 billion through Q3 2026, roughly 44% above the previous full-year record set in 2021.⁵ US venture funds raised US$108.5 billion through Q3, of which first-time funds captured approximately 4.5%.⁵ According to PitchBook and NVCA, established firms took 88.2% of US VC capital raised in 2026 through Q3.¹⁰

Listings remain scarce relative to the stock of private companies. Just 18 companies went public in Q3 2026, while 992 active unicorns held a combined valuation of US$5.7 trillion.⁵

Notable examples

Firm	Headquarters	Size or activity
Andreessen Horowitz	Menlo Park	Raised US$23.8 billion in 2026, more than 20% of US VC fundraising, according to PitchBook and NVCA, Q3 2026;¹⁰ 178 deals in 2025¹
General Catalyst	United States	213 deals in 2025¹
Sequoia	United States	139 deals in 2025¹
Lakestar	Zurich¹¹	Over US$6 billion of assets under management, as stated on its website in October 2026¹²

The table is not a ranking and implies no recommendation.

How advisers work with venture capital firms

Seed and early-stage rounds are usually raised through direct introductions from founders, other investors or industry contacts rather than through advisers. Advisers appear more often at later stages: when a portfolio company raises a large growth round from international investors, when a VC firm raises a new fund from LPs, when a company is sold and when a firm or its LPs sell fund interests or company stakes in the secondary market. With 992 unicorns valued at US$5.7 trillion and 18 listings in Q3 2026,⁵ sales to trade buyers and secondary transactions are the alternative to waiting for a listing.

Anglo-Suisse Capital advises on capital raising, M&A and secondary transactions with professional investors.

Frequently asked questions

How much venture capital was invested globally in 2025?

US$469 billion, up 47% year on year, across 29,501 deals, according to CB Insights.¹

Is venture money available outside AI?

It is concentrated. AI companies took 65.4% of US deal value in 2025.² Excluding mega-deals, about 14,865 US deals totalled roughly US$105 billion.²

Are VC funds raising easily?

No. US VC fundraising was US$67 billion in 2025, the lowest in nine years.²

Are venture exits recovering?

Only partly. US exit value was US$217 billion in 2025, twice 2024 but 27% of the 2021 peak.²

Which managers are winning LP capital?

Established firms took 88.2% of US VC capital raised in 2026 through Q3, according to PitchBook and NVCA.¹⁰

What is a typical early-stage round?

The global median early-stage deal size was US$2.7 million in Q1 2025, according to CB Insights.⁶

Can large fund managers use the EuVECA label?

Yes. Since Regulation (EU) 2017/1991, managers authorised under the full AIFMD can register qualifying funds as EuVECA.⁷

How large is the European venture market?

Europe recorded approximately US$68 billion of venture funding in 2025 on CB Insights data cited by BVK.³

Working with Anglo-Suisse Capital

Anglo-Suisse Capital advises companies, fund managers and shareholders on capital raising, M&A and secondary transactions with professional investors in the UK, Switzerland and internationally.

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Sources

This page is general information for professional investors and is not investment advice. Figures are taken from the sources listed, as at the dates stated.