Top 5 VC Success Stories
OK, lets say up front that this isn't a comprehensive list. These are just five examples of big brands that took advantage of early-stage VC to go global. It’s a snapshot because there aren't many IT, software or biotech firms today that don't have VC in their genes. But founders aim for the stars so this is what can be achieved when you’ve got the backing and nous behind you.
You may not have heard of this company (founded in 1957) but it’s possibly one of the world’s most influential as it developed the use of silicon in electronic technology. Silicon revolutionised computing by being plentiful and cheap to process, and this development essentially enabled the explosion of personal computing.
Fairchild was backed by Venrock Associates, one of the early movers in VC (founded by the Rockefeller family) in the late 1950s and is today worth around $1.5 billion. History no doubt would value it much higher.
Steve Jobs and Steve Wozniak started selling the Apple I to some curious tech-heads and geeks in 1976 for $666.66. These days, the company has built on that modest beginning and sells everything tech to everybody. Apple is now the world's biggest company by market capitalisation, with a value at around $450 billion.
To get from being a beardy, nerd-fest item to being the coolest company on the planet, the big fruit needed help. The early investment into the company was a fairly informal Hail-Mary from the deep-pocketed Mike Markkula in the late 1970s. But this investigation shows that Venrock also had a hand in what may well be the most successful VC investment of all time.
In March, 2006, Jack Dorsey sent a message on his mobile: “Just setting up my twttr”. It was the first tweet. How many hundreds of millions have done the same since, and how many billions of messages have been sent is anybody’s guess, but the little blue bird has become one of the most recognisable and prevalent marques worldwide. Revenue in 2013 was around $700 million.
As this breakdown shows, Twitter had VC on board pretty much every step of the way. From its first outreach in 2007, reaping $5 million in startup investment (just as one startup could in The Big Pitch), Twitter's seven primary investment rounds since have been ever more hotly contested and newsworthy. And fully subscribed.
It's an experience that co-founder and CEO Jack Dorsey learned a lot from and this link has some really interesting grabs on Twitter's VC process.
If you've seen the movie “The Social Network”, you know how the story allegedly goes; Mark Zuckerberg was a run-of-the-mill student at Harvard when he and some friends started a site to compare dateable girls on campus. In a year or so, thefacebook.com had generated enough interest – and publicity controversy – to attract VC mavens like Peter Theil (Paypal co-founder) and Jim Breyer.
By 2012, the company had dropped the 'the' and was ready to list. It was valued at $US104 billion, then the highest IPO ever. That market valuation is now at around $140 billion. The site currently attracts something like 1 billion users every month, regularly making it the world's most visited site.
Unlike the others here, the best bits of the Dropbox story are likely still to come. Started by Drew Houston and Arash Ferdowski in 2007, the file sharing and storage service is now the chosen device for many in this high growth area. When the funders dropped out of college to develop the service, they soon drew VC seed funding from Y Combinator. In 2008, VC bigwigs Sequoia hopped on board and in 2009 fellow heavyweights Accel moved in for Series A funding.
Over $1US billion has been raised as Dropbox moves ahead apace with continuing investment from the above-mentioned VC players and others, like Blackrock.
Sometimes seen as new kids on the block, VC has been at the foundation of some of the world's most iconic brands and developments. For today's start-ups, the good news is that the industry is still growing and looking for opportunities.