It’s never been easier to find venture capital firms in California. There are now over 200 California venture capital firms operating in the state, and more than $2 billion is invested by venture capitalists annually.
List of Top Venture Capital Firms in California
The following list of California venture capital firms are all members of the National Venture Capital Association (NVCA). These venture capital firms help entrepreneurs develop innovative concepts into high-growth enterprises.
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What is Venture Capital?
Venture capital is a form of financing provided to startups and early-stage technology companies. Venture capitalists take on the risk of financing risky start-up enterprises in return for potentially high returns, which are usually generated when these new companies grow and succeed.
What Types of Business Use Venture Capital?
Venture capitalists typically invest in businesses that have a high potential for growth. This can include startups with a new and innovative product or service, businesses that are expanding rapidly, such as companies in the tech industry, including information technology, cloud computing, mobile communications technology, life sciences, cybersecurity, healthcare services, medical devices, enterprise software and fintech companies that are set to dominate their industry in the future.
Tips for Attracting Venture Capital in California
- Do Your Research – Venture capitalists are no different than any other type of investor, in that they want to see a return on their investments. Make sure that you can articulate how your business will make money and why you are the best person to execute your vision.
- Have a Strong Management Team in Place – Venture capitalists are more likely to invest in a company that has a team of experienced individuals who are passionate about their venture.
- Get Organized – Make sure you have all of your financials in order and can clearly explain your business model and strategy.
- Build Buzz – Let people know what you are working on and get them excited about your venture. The more people that are excited about your business, the more likely you are to attract venture capitalists.
- Seek Out Advice – There is no shame in asking for help when it comes to raising money. There are a number of organizations and individuals who can provide guidance on how to obtain venture capital funding.
Understanding the Stages of Venture Capital Funding
Venture capitalists offer financing to technology companies in three different stages: seed and early-stage, start-up stage, and growth stage. Each of these stages is categorized by the purpose of venture capital funding.
Seed and Early Stage – Venture capitalists providing early-stage funding will typically expect some type of equity stake in exchange for their investments. In the seed and early stage, venture capital firms are not necessarily expecting a return on their money, but they recognize these early-stage companies as a potential winner and want to help grow it into something great.
Start-Up Stage – A venture capital firm will typically provide capital at this stage to any venture that has already received early-stage funding and is looking for additional growth capital. Venture capital firms that invest at this stage generally expect an equity stake in the venture but are willing to provide additional financing for the venture.
Growth Stages – Venture capital firms at this stage typically want to make sure that they retain their previous investments before making any additional investments. Venture capitalists who invest at this stage expect a significant rate of return on their money and will be looking for a significant equity stake in the venture. It is possible to have multiple funding rounds in the growth stage.
Other Investors in California
There are a number of other investors in California that startups should explore when looking for capital funding. These include angel investors and private equity firms.
Angel Investors – Angel investors are individuals who invest their own money in startup companies in exchange for an equity stake in the venture. They are often wealthy individuals who want to venture out on their own and seek out high-growth opportunities.
Private Equity Firms – Equity firms focus on acquiring established businesses, making them profitable, and then selling them for a profit. These active investors can offer capital to help build up a venture as well as provide operational expertise to make it grow successfully.
Raising money is never easy, but it can be especially challenging for startups in California. The Golden State is home to some of the biggest venture capital firms in the world, but that also means there are more startups competing for venture funding. Additionally, venture capitalists have a wide variety of financing options to choose from so you have to clearly understand who your company is targeting and what kind of value it will bring them if they invest.
Los Angeles Entrepreneur Resources
- Los Angeles Business Solutions: Provides advice and information on starting a business, including small business start-up kit, tax and registration information, and financing advice.
- Los Angeles Venture Association: “The Go-To Organization for Capital Raising,” The Los Angeles Venture Association (LAVA) provides forums for entrepreneurs, executives, and financiers.
- socalTECH: “Hi-Tech News for Southern California.” The premier source for Southern California Technology & Venture Capital News.
- Los Angeles Chamber of Commerce: Through advocacy and collaboration, the Los Angeles Chamber of Commerce supports thousands of businesses based in Los Angeles.
- Los Angeles Business Council: The Los Angeles Business Council provides business education and advocacy for businesses in Los Angeles.
- Los Angeles Public Library – Small Business Department: The Business Collection provides information on all aspects of entrepreneurship.
- Los Angeles Business Journal: The LA Business Journal keeps business owners and entrepreneurs up-to-date on the latest business news in the LA region.
San Francisco Business Plan Resources
- The US Small Business Association San Francisco district web page.
- City of South San Francisco’s business resources page.
- City of San Francisco’s business portal provides information and tailored tools to help entrepreneurs easily navigate the steps to start, manage, and grow a business.
- The Office of Economic and Workforce Development (OEWD) and City partners offer a number of resources to assist small businesses seeking to start, stay and grow in San Francisco.
- The San Francisco Small Business Development Center provides business owners and managers with information, training, and specialized one-on-one consulting.
- Golden Gate Business Association business resources page. General business resources, plus LGBTQ-oriented business resources.
- The San Francisco chapter of SCORE is a volunteer organization where established businesspeople provide mentorships, workshops, events, and consulting for entrepreneurs.
San Diego Business Plan Resources
- The US Small Business Association San Diego district web page.
- The City of San Diego’s business resources and incentives page.
- The San Diego East County Chamber of Commerce business resources pages.
- The San Diego chapter of SCORE is a volunteer organization where established businesspeople provide mentorships, workshops, events, and consulting for entrepreneurs.
- North San Diego Business Chamber offers a variety of networking and informational events for entrepreneurs and businesses in the area.
- San Diego North Economic Development Council’s business assistance resources page.
- San Diego & Imperial Valley SBDCs offer access to confidential, no-cost professional business consulting for those who want to start or grow their business.
How Growthink Can Help
Growthink is a national business consulting firm headquartered in Los Angeles. Since 1999, our business consultants experts have written more than 4,000 strategic business plans for entrepreneurs, small businesses, mid-sized firms, and Fortune 500 corporations seeking funds from venture capitalists, angel investors, or other investors. We can help your business, too!