The average venture capital investor with decision-making authority is a white male in his late 30s who earns at least six figures and has an MBA or other form of advanced degree. Additional demographic details related to veteran status and location are also provided within the below summary.
- A 2019 analysis by Deloitte of 203 venture capital (VC) firms in the US and their over 2,700 employees found that while VC firms employ a relatively gender-balanced workforce overall, men dominate decision-making roles within these organizations by a wide margin.
- Notably, venture capital employees in America have remained relatively evenly split between women (45%) and men (55%) since 2016.
- However, decision-makers within VC firms are almost entirely male, as evidenced by the percentage of men holding senior-level roles (71%), investment positions (79%) and investment partner roles (86%).
- The Deloitte survey is corroborated by a slightly dated (late 2017) analysis of American angel investors by Wharton and the Angel Capital Association, which found that 77.9% of this broader investor group is male.
- Moreover, this quantitative data is corroborated by more anecdotal evidence of the gender divide in VC firms, particularly in the biotech industry.
- For example, InformaConnect reported in 2019 on the top VC investors “who matter in biotech,” and highlighted mostly men as part of this analysis.
- In contrast with the gender diversity of VC firms, at least at lower levels, American VC organizations employ an almost entirely white workforce, according to Deloitte.
- Asians, Hispanics and Blacks represent the minority across all levels of US VC firms, especially for senior-level roles (18% Asian, 4% Hispanic, 3% Black), investment positions (17% Asian, 5% Hispanic, 3% Black) and investment partner roles (15% Asian, 3% Hispanic, 3% Black).
- Similarly, Wharton and the Angel Capital Association report that almost all (87.6%) of angel investors in the country are white, and that the largest racial/ethnic minorities are Asians, Hispanics and Blacks.
- Meanwhile, anecdotal discussion of racial/ethnic diversity across US VCs, such as InformaConnect’s list of the top VC investors “who matter in biotech,” similarly highlight individuals of primarily white backgrounds.
- According to Deloitte, the largest cohort of investment professionals at American VC firms are Millennials in their mid-30s.
- Not only do these “older” Millennials represent 42% of the overall VC workforce, but they comprise 42% of investment professionals at these organizations and 8% of investment partners.
- However, the most senior decision-making roles at VC organizations are still mostly held by Generation X, and have an average age of 51 years.
- Meanwhile, data from Wharton and the Angel Capital Association indicates that US angel investors trend slightly older, with an average age of 57.6.
- Industry experts (e.g., Investopedia, Glassdoor, Mergers and Inquisitions) report that the average income of an American VC investor varies significantly, but is much higher than the national average of $48,672.
- For example, Glassdoor reports than an entry-level role at a VC firm (e.g., venture capital associate) has an average base pay of nearly $120,000 and can range as high as $224,000 per year.
- Similarly, Mergers and Inquisitions reports that a pre-MBA associate role with a VC firm ranges between $150,000 to $200,000 per year, while top roles such as investment partners earn between $500,000 and $2,000,000 per year.
- Investopedia corroborates this top-tier income analysis, by reporting that VC investors can earn a salary of $1 million per year.
- Data from US-based Investopedia as well as the recent Wharton/Angel Capital Association analysis indicate that VC investors are typically highly educated.
- For example, Investopedia reports that 50% of VC investors have an MBA.
- Corroborating this finding, Wharton and the Angel Capital Association report that 51% of angel investors have an MBA, while an additional 11% have another professional degree and a further 11% have a PhD.
- Almost all VC investors in the US have no military experience, according to Deloitte.
- Although approximately 8% of the US population are veterans, only 2% of VC employees in 2018 and 1% of VC employees in 2016 were veterans.
- Deloitte’s 2019 analysis suggests that America’s VC professionals primarily live in the Northeast and Western United States.
- Notably, almost all of 203 venture capital (VC) firms surveyed and their over 2,700 employees are located in the West (104) and North East (47), owing to the concentration of VC firms in these coastal areas.
- Similarly, Wharton and the Angel Capital Association reported that approximately half of angel investors in the US are located in California (17%) or the North East (12.8% + 7.5% + 10.7% = 31%).
Other Helpful Information
- US-based Investopedia provides a potentially useful summary of “a day in the life” of a venture capitalist, which may provide further insight into the profile of US VC investors.
Although pre-compiled, publicly available information about the landscape of the US biotech investment market is limited, relevant research suggests that the sector is highly fragmented from an investor perspective. Additionally, it appears that the most active investors are unusually large in size, and that most investor attention and activity is focused on the East and West coasts of the US.
- Industry experts (e.g., PitchBook, Bay Bridge Bio, Cipherbio News) suggest that investor competition within the US biotech market is high, owing to the larger and growing number of participating investment funds.
- Most notably, the latest available data from PitchBook indicates that over 550 venture capital investors alone participated in biotech funding rounds between 2015 and 2017, suggesting that the landscape of active investors in the US biotech market is highly fragmented.
- Data from Cipherbio News about the global life science investment market helps corroborate this finding, given that biotech companies in the US are the “dominant ones by far” in receiving investor capital within the larger life sciences industry.
- Specifically, out of 517 deals in the sector since 2019, the top 30 investors participated in only 326 deals, or approximately two-thirds of transactions during the period.
- Notably, these figures reflect some consolidation among investors in the marketplace, given the recent exit of Chinese investors from the US biotech industry.
- According to Bay Bridge Bio, Chinese investors were previously one of the “most active funders of biopharma” in the US, but were essentially expelled from US biopharma investment in 2019 following new CFIUS regulations.
- However, Bay Bridge Bio and Cipherbio News report that “new classes of investors” are increasingly entering the US biopharma market in China’s absence, including crossover investors and technology giants such as Google, Amazon, Apple and Uber.
- Meanwhile, Bay Bridge Bio notes that this highly competitive and fragmented investor landscape varies somewhat by biopharma investment type, with late stage funding generating the most competition, while early stage funding remains “dominated by traditional biotech VC.”
Scale of Average Investor
- Although discussion specifically related to the size of investors in US biotech companies is relatively limited, credible media resources (e.g., PitchBook, Genetic Engineering & Biotechnology News) suggest that the most active investors in the sector may be atypically large.
- Notably, the top nine venture capital investors in the US biotech market according to PitchBook have assets under management ranging between $2 billion (Foresite Capital Management) and $14 billion (NEA), apart from Novartis Venture Fund ($800 million) and Atlas Ventures ($265 million).
- According to industry media (e.g., Both Sides of the Table, Medium), investors with fund sizes over $600 million are considered the largest in the industry.
- As such, eight of the top nine investors in the US biotech market are unusually large compared with the overall US investment industry.
- Similarly, the top 20 biotech investors identified by Genetic Engineering & Biotechnology News have all have fund sizes between $1.9 billion (SV Life Sciences) and $14 billion (NEA), apart from Atlas Ventures.
- Based on this investor data from PitchBook and Genetic Engineering & Biotechnology News, it therefore appears reasonable to surmise that most active investors in the US biotech market are unusually large and have assets over $1 billion.
- Meanwhile, data from Cipherbio News and Statista indicate that the East and West coasts of the US are the greatest centers for investment activity in the US biotech and life sciences market.
- For example, 2018 data from Statista indicates that the two largest clusters of life sciences venture capital funding in the US are San Francisco ($5.72 billion) and Boston ($5.56 billion), followed by the East and West coast cities of San Diego, New York, Washington, D.C. and New Jersey.
- Cipherbio News corroborates this data, by reporting that New York, Massachusetts, San Francisco Bay, San Diego, and Los Angeles are among the top ten regions for life sciences investment in the US.
- Cipherbio News adds that while California and Massachusetts attract the most investor funding in this sector, funds raised in the New York area have grown by 52% in the past decade.