How VCs Find Rapid Growth in an Unstable Economy

What are the current trends in the VC market? Well, in 2021, venture-backed companies have garnered investments that amount to a record $330 billion during 2021, which is a major leap when compared to $166 billion registered back in 2020 (which was also a record at the time). It must be said that for a few years now, mostly large and late-stage investments proved to be the key drivers of strong performance. For that reason, we have seen huge deals hitting a new watermark, amounting to $100 million or more.

Of course, the rise in funding does not automatically mean we’re looking at a bigger ecosystem when it comes to VC money. NVCA (National Venture Capital Association) forecasts that we’ll see 8,406 deals take place during 2022, which marks an apparent drop when compared to 12,362 in 2020.

Bearing in mind these fluctuations, dramatic drop offs, and other fiscal challenges, VCs are starting to realize they need more data about companies if they are to continue seeking safer and more stable investment opportunities. With that very goal in mind, Osterus carries out a thorough comparison of two hot players on the modern-day investment scene — Andreessen Horowitz and Insight Partners. The comparison focuses on Employment and Education of the workforces of both companies, and surprisingly leads to some pretty fascinating insights.

Andreessen Horowitz — History, Investments and Market Influence

Looking at Andreessen Horowitz and their history of investments, they left a mark on some pretty trendy companies. Just to give you a few examples, California-based aerospace manufacturer Hadrian Automation raised a $90 million — the investment round was led by Andreessen Horowitz and Lux Capital. While this company was founded in 2020, they managed to raise almost $100 million, which is no small feat and AH was a major contributor in that respect.

As of late, AH also invested into Tomorrow Health, a firm mostly focused on expanding partnerships with national and regional health plans. To clarify the goals and objectives a bit more, let’s take closer look at TH. It’s basically a company that devoted its attention to creating tools that connect physicians, patients, plans, payers and HME providers. The idea behind the project is to help ease the transition for patients who are switching to the homecare setting. While the investment round was helmed by BOND, Andreessen Horowitz also joined the funding along with Obvious Ventures, BoxGroup, and Sound Ventures.

Another noted effort, this time on the biotech front, is Cartography Biosciences, which received $57 million for an antigen atlas designed to point scientists towards accurate and effective immunotherapies. Andreessen Horowitz joined Wing VC and other seed investors in yet another round of successful funding. As of April, 2022, Andreessen Horowitz has a registered AUM of $28.2 billion.

Another cool facet about AH and its presence in the media. The leadership behind Andreessen Horowitz is known for being in the thick of the market and often having press statements that advise other players in the VC field. Recently, cofounder of Andreessen Horowitz, Marc Andreessen, stated that right now C-suites big companies are facing great challenges in the age of digital transformation. He advised IT CEOs who are fighting to make a successful shift to the digital age that they should endeavor to unlearn what that they have learned. As one of the most influential and indeed well-known venture capitalists in Silicon Valley, he was basically saying that business leaders would take their utmost IT expert, sitting in their board meetings, and place them at the head of the company.

Insight Partners — Market Reach and Influence

Insight Partners joins Andreessen Horowitz as another key company that remains highly influential on the playing field of big business investments. In a powerful effort to make a unique impact on the market, Insight Partners recently linked corporate tech leaders with IT startups and are climbing the ladder of success as a software investor. IP was also an early backer of Twitter, and has enlisted leaders from Boeing, and Mercedes-Benz to ensure faster growth for young startups.

But that’s not all. The NY-based tech-focused investment company is reportedly negotiating to raise a new $20 billion flagship fund, in a remarkable effort to continue betting on fast-growing technology, software and IT businesses. The company currently has an approximate AUM of a breathtaking $95 billion.

AH & IP — Workforce Analytics Comparison

We have thoroughly examined these two major investors. To kick off, we inspected data regarding previous job experiences, and it’s interesting to note that AH aims to focus on IT and tech ecosystems. They are primarily focused on hiring experts from major companies such as Google, Facebook, Microsoft, and Apple. This kind of hiring practice indicates they may be looking to keep their pulse on the tech market by recruiting employees with experience from recognizable brands with the IT and software markets.

Insight Partners, on the other hand, is looking to find talent elsewhere. Their priority is to recruit staff from firms such as Mckinsey & Company, Morgan Stanley, Goldman Sachs, and PWC. Clearly, they are prioritizing expertise from global management, large investment banks and accounting.

The Higher Education, The Greater the Impact

Utilizing the employment view in Osterus gave us a pretty good idea about the employment history of both of these companies. With a mere click though, we are able to widen our gaze to unlock even more valuable insight. First off, let’s take a look at University Education. So, which Universities do these companies prefer to hire from. As we can see below, Insight Partners recruits people who have studied at the University of Pennsylvania (approx. 26%), while a majority of employees at Andreessen Horowitz have graduated from Stanford University (around 27%).

An interesting parallel is that both companies have a reasonable percentage of employees who have studied at Harvard. IP has 8.3% and AH has around 15% of people coming from that prestigious university.

Next up, we focus on an important part of employee education, which includes Education Degree Distribution. If we examine Insight Partners more closely, we can see that only 1.9% of their workforce has a Doctoral Degree. Meanwhile, it’s a different situation at Andreessen Horowitz — slightly above 8% of their employees have a Doctoral Degree. That’s a considerable difference, which indicates that Insight Partners is placing more emphasis on people with higher education.

Spot Even Greater Market Insights in Venture Capital Ecosystem

Companies like Andreessen Horowitz are striving to make an impact in the health-tech space, and at the moment, this particular area focuses on solving pain points for companies and institutions that have to deal with on a daily basis. These include everything from staffing problems like stress and burnouts experienced during the ongoing pandemic. The challenges that are not only increasing, but they are creating numerous roadblocks for VCs, PEs, M&A professionals, and hedge funds.

What Other Firms are Making an Impact on VC, PE and M&A?

There are numerous venture capital firms and private equity firms endeavoring to make their own mark in the market. For instance, as of late, in the market of health tech and digital health, a variety of companies are moving in. Just to give you a few examples, apart from Andreessen Horowitz and Insight Partners, these firms include Tiger Global Management, SoftBank, Rock Health, F-Prime Capital, Founders Fund, Kleiner Perkins Venrock, NEA and others.

Osterus enters the fray with its transparency, accuracy and incredible data that offer insights into any market, from health-tech to fintech. As the challenges of the venture capital market grow, our AI-powered workforce analytics software gets more sophisticated. As a result, you can potentially crunch through big data fast and easy, regardless of the market you are investing in.

With the data showcased above, venture capital firms can expand their gaze in an increasingly risky economy, thereby gaining more information about competing companies, potential investments and overall data on human capital.

Feel free to reach out to us, or schedule a demo, and discover how you can quench your thirst for new investment opportunities.