ARE YOU ON THE LIST?

CB Insights is working with The New York Times to identify the best VC professionals.

THE DEADLINE TO SUBMIT DATA IS FEBRUARY 11, 2019

How Will the VC Rankings Work?

We're working again with The New York Times to identify the best VCs.


Several hundred VC firms submitted their portfolio and Board of Directors level data last year.  


Go to The Editor and make your additions, edits, etc. 


It's free. Create an account and you are on your way.

What's New This Year?

Ranking Algorithm Factors:


We're exploring additional rankings for other types of investors:

  • Top VCs by Region (Asia)

Performance Persistence


In venture capital, past performance does indicate future performance and so a track record of successes is important. That said, the significance or value of these successes decays over time which means that having invested in the winners of 10+ years ago is less important to us than investing in the winners more recently. Our goal is to identify the top VC professionals today and not of the best VCs in history. This is an important distinction.


Network Centrality


Investment Syndicate DashboardThis is a measure of how connected a venture capitalist is to other notable VC professionals as well as how connected their firm is to other quality firms in the landscape. Network breadth and quality has been shown to to be a critical driver of VC performance. The higher a firm’s Network Centrality, the better its access to deal flow, follow-on funding, and industry information. Network Centrality is very analogous to Google PageRank for investors in that investors who share investments with high quality investors and who have a diverse set of connections have higher Network Centrality ‘rank’ than those which do not. In a network-driven industry like venture capital, who you know is as important as what you know. (For example, see our earlier VC network analysis).


Brand


This is a measure of the visibility and reputation of a VC firm and professional within the industry. Brand is important in venture capital as firms with great brands and reputations see higher quality dealflow, gain entry into emerging companies and can also achieve better economics because they are a preferred source of capital for company founders. Brand has also been demonstrated to be a good way to measure a firm’s ability to pick the right opportunities and add value to a portfolio companies.


The ability to win competitive deals and back serial entrepreneurs who have choices among investors is an indication of brand strength. Brand is not Twitter mentions, retweets, followers or any other vanity metric.


Investment Discipline


VC returns have been shown repeatedly to be tied to discipline. Discipline at the partner level is determined by a consistency as it relates to industry and stage preferences as well as pace of investment. Disciplined stage and industry investing fosters learning opportunities and the development of stage and sector specific knowledge and skills.


Selection Aptitude = stage of entry + size of wins


A measure of dealflow quality and selection prowess for each investor. It highlights each investor’s ability to source and ultimately select high quality investments and then shepherd them to favorable outcomes. In other words, being involved in big exits is great. Getting into those big exits early is even better.


Illiquid Portfolio Strength


This score measures the quality of current, non-exited companies in an investor’s portfolio and also looks at the investor’s entry point into the company.


The models underlying each of these measures collectively will determine a score for each investor that will drive the rankings. It is worth noting that all editorial decisions will ultimately be made by the team at The New York Times.

Re: Evaluation Criteria


Our favorite comment last year from a VC who heard we were doing this was "Given it's you guys, it will be data-driven which means our handwavy BS won't work in these rankings."


That is a fair characterization.


These rankings will employ a systematic, data-driven, algorithmic approach to assessing venture capital professionals and draws upon academic research that has analyzed what drives fund outperformance. 


Many of these build upon and are consistent with what we've done in the development of Investor Mosaic but are being applied to individual VC professionals as opposed to firms.