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The Venture Uplift Effect describes the difference between the outcomes of companies supported by global Tier 1 investors, versus those supported by other venture-backed companies.
The venture uplift effect is the theoretical difference in growth and realisation outcomes that we see between companies invested in by global Tier 1 venture capital investors, and other venture capital investors.
Much research in this space is underpinned by a tautological argument - that globally leading venture capital investors are achieving a multiplier effect, and that multiplier effect is why they are seen as Tier 1 investors.
This infographic sets out to describe the performance of companies and the investors that have taken equity in them, helping us to understand the nuanced and complex relationship between companies and investors.
This research builds upon our work looking at the journey from $1 to $100mn, through the lens of Start, Build, Scale.
Normalising for population of investees and looking at the realisations of these firms, Tier 1 VC backed companies are:
For this research, we started with a cohort of SaaS and Cloud companies founded between 2005 and 2022:
22% of all companies that have raised over $3mn venture capital are backed by a Tier 1 VC (2,983 firms).*
This is where the research takes an exploratory approach to determining which venture capital firms were Tier 1, and which were not. Rather than using performance data on portfolio companies (which would have led us to the conclusion that the highest performing VCs were Tier 1, and that Tier 1 VCs were the highest performing, in a circular fashion) we asked members of our investment team who they perceived to be the most prestigious, or well-renowned VCs globally.
The perception of performance and reputation, being conceptually different, but building on things like coverage of high-performing companies, partners, and exit realisations, feeds into the zeitgeist of VC, which is what we ultimately wanted to explore the validity of.
The VCs that were determined to be Tier 1 are: