Not all VC firms are created equal. Here are 6 different types of firms to know

Hi! I’m glad you’re here. You’ve made it to issue #5 of VC Demystified🪄.

My name’s Nicole - I’m a Principal at an early stage venture fund, and I know firsthand that VC can often be a black box. Breaking into the industry may feel daunting and resources can seem scarce and inaccessible. I wanted to put together a newsletter to give others the playbook I wish I had when I first started.

I’ve had a few people reach out to me this past week saying that they landed a VC role or are in the late stages of interviews for a VC role. These range from interns to senior associates. If you’re still actively recruiting, keep it up! It can take months to land your dream role, but it will happen💪.

Today’s deep dive: The 6 main types of VC firms and how they operate

My personal mission is to open as many doors as possible for other people and this newsletter is just one avenue to do that. As always, I will continue to post VC insights daily across my socials for those of you who prefer those channels.

The 6 main types of VC firms and how they operate

When looking to break into VC or move to a new role within VC, it’s incredibly important to understand the nuances of different types of VC firms. The type of firm dictates your role and affects what your day-to-day looks like.

It’s also incredibly important for founders to understand the different types of firms as it will affect how, when and why they support you.

There are 6 main types of VC firms:

1️⃣ Micro VC
2️⃣ Institutional VC
3️⃣ Corporate VC
4️⃣ Government VC
5️⃣ Family Office
6️⃣ Angel Syndicate

The quick TLDR is that all these VC firms are very different.

The VC firms vary by:

• Limited Partner base (aka where their capital comes from)

• Investment stage

• Check sizes

• Ownership targets

• Diligence timeline

• Investment objectives (aka the reason for investing)

• Control levels (aka how they support their portfolio companies)

• Risk appetite

+more. I’m going to take you through all 6 of these fund types, giving you guidance on the above criteria for each. I’ll also provide you with real life fund examples.

For VCs, this is helpful for many reasons. It can help you choose the right role for you. It can help you build out syndicates for your portfolio companies. It can help you with intentional networking. Overall, it will make you a more strategic investor.

For founders, this is critical information to know as you think about who will sit on your cap table. Choosing the right partners that fit your business goals and values will be a key part of your success.

Let’s get into it!

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