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Average Number of Private Equity Investors per Round of Venture Capital Financing

by Jonathan Parker

  • 01 Nov 2012
  • PE

For venture capital financings completed in 2012 so far, there has been an average of 2.4 private equity investors per deal (excluding individual business angel investors, high net worth individuals and family office investors). In particular, earlier stage investments such as seed and angel rounds tend to be predominantly comprised of individual investors; however, this analysis focuses on the number of private equity firms investing in each round.

Because seed/angel deals have, on average, a lower value than later stage deals, they are often completed by individual angel investors. This is reflected in the average number of private equity firms investing per seed/angel deal which stands at 1.8, lower than at any other stage of venture capital investment. As one might expect, series A deals show a slightly higher number of private equity firms investing, with an average of 2.2 per deal. Series B and series C financings have an average of 2.8 and 3.6 private equity firms investing per deal, respectively. As companies progress further through the funding stages and generally warrant and require larger investments, they tend to receive attention from more investors, with private equity firms investing as part of a larger syndicate. Consequently, series D and later rounds have the highest average number of private equity firms investing, with 4.1 per deal.

In August 2012, CardioDx, Inc. completed a $58mn series F financing from a 14-firm syndicate. The majority of these firms had invested in prior rounds of financing for the company. Similarly, in October 2012, FundersClub raised $6mn of seed financing from a group of investors that included 15 firms.

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