Early stage funding provides backing to companies in management team building, pre- and post-revenue,¬†and initial operational phases.¬†Investors typically¬†partner with¬†businesses with emerging ideas and high growth potential.¬†Early stage private equity is considered to be a riskier type of financing in that the business, product, or service is¬†still young¬†in the market.¬†It does, however, deliver a high return to investors once the business becomes successful.
According to PricewaterhouseCoopers and the National Venture Capital Association, the amount of investments¬†in early stage companies has steadily¬†increased over the years, totaling 35% or more of venture capital funding in the United States.¬†Early stage venture capital firms can have diverse¬†fund sizes ranging¬†from¬†as little as $10 million¬†to billions of dollars depending on their pool of investors. Typically, they invest from¬†$10,000 to $2 million or more¬†in individual companies.¬†Early stage investors usually prefer to back companies that are offering innovation, disruptive solutions, or¬†value¬†creation for its customers¬†in a specific market or industry.
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BlueRun Ventures specializes in early stage investments and¬†currently¬†has $1 billion in capital in management.¬† Since its formation¬†10 years ago, it¬†has invested in technology-based businesses across the world including PayPal and Pogo.com.¬† It¬†normally¬†capitalizes on¬†prospects in the Internet, media, mobile, enterprise software, semiconductor,¬†and components areas.
ARCH Venture Partners currently has seven funds totaling $1.5 billion and supports companies within life sciences, IT, and physical sciences through seed and early stage funding.¬† The firm originated in the midwest region, but has expanded to provide backing to companies on a nationwide basis with offices in Illinois, Texas, Washington, and California.
Bay Partners is a California venture capital firm aiding early stage and growing businesses in the IT and healthcare sectors.¬† It currently has $1 billion in capital under management and has aided more than 300 start up ventures since 1976.¬† It has backed businesses, such as Like.com and Jambool, which have been acquired by Google.
Matrix Partners invests in start ups across diverse industries, providing early/late stage and follow-on funding ranging from $2 million to $10 million.¬† With $1 billion in total capital, the company finances entrepreneurs in the United States, India, and China.¬† Over the past 30 years, it has backed companies such as Apple Computer, SanDisk, and TheLadders.com.
Asset Management Company was created in 1965 in California as a Palo Alto venture capital firm focusing on information sciences, life sciences, and health sciences technology businesses.¬† It has since then aided more than 250 start ups through diverse stages of company development from early stage through growth equity. Asset Management Company typically enters businesses during the early or seed stage rounds, investing anywhere from $500,000 to $2 million.
Sequoia Capital is a venture capital firm with presence in the United States, China, Israel, and India.¬† It backs companies in the seed, early, and growth stages with investments ranging from $100,000 to $100 million. Sequoia Capital is considered one of the top Menlo Park, CA venture capital firms offering west coast funding, partnering with entrepreneurs in the financial services, healthcare, Internet, mobile, and technology sectors.¬† It has backed large players such PayPal, LinkedIn, Google, Yahoo!, and Cisco, and YouTube since its launch in 1972.
New Enterprise Associates is a multi-stage venture capital firm supporting companies in diverse phases from seed stage to growth equity, and has funded more than 650 organizations worldwide.¬† The company has more than $11 billion in invested capital with companies in the IT, healthcare, and energy technology industries with an open portfolio of 265+ growing businesses.
Foundation Capital was formed in 2005 as a subsidiary of the New Jersey Health Foundation¬†to back seed stage companies within the healthcare and life sciences area focused on proprietary and emerging products and technologies.