Keeping Score in Sil­i­con Valley

Forbes - - INSIDE SCOOP -

Forbes be­gan rank­ing tech in­vestors shortly after tech in­vest­ing be­came cool. As with any startup, the turn-of-the-cen­tury Mi­das List was a trial-and-er­ror grab bag, with lawyers and bankers mixed in among the Sand Hill Road crowd. In 2010, Forbes even sus­pended the list for a year to take stock. Like many of the firms we cover, we emerged stronger with a rig­or­ous method­ol­ogy, a tor­rent of data and a great part­ner (TrueBridge) to help crunch it.

Our model pri­or­i­tizes big­ger, bolder bets, which we be­lieve em­bod­ies the Forbes world­view and the “Mi­das touch.” In­vestors get credit only for deals with sub­se­quent raises (at a val­u­a­tion of at least $400 mil­lion) or ex­its ($200 mil­lion-plus), where they show solid or bet­ter re­turns (some­times way bet­ter, like Steve An­der­son’s 700x score on In­sta­gram). No more than two part­ners in a firm can share ap­por­tioned credit for deals. And to com­bat stag­na­tion, deals dis­count slowly over five years be­fore fall­ing off the list en­tirely (sorry, Google and Face­book back­ers).

“Every year, as we get more data, the bar keeps get­ting higher,” says Forbes’ Alex Konrad, who over­sees the Mi­das List. “Forbes stands as the gold stan­dard in ven­ture cap­i­tal.”

Keeping score means some­thing dif­fer­ent this year, how­ever. The #Me­Too move­ment has put the most at­ten­tion on the en­ter­tain­ment and me­dia fields, but no two in­dus­tries need to re­form them­selves more ur­gently than ven­ture cap­i­tal and tech, the twin tow­ers of bro-dom.

Fewer than 10% of ven­ture cap­i­tal part­ners are women, and only 15% of star­tups funded in 2017 were founded by women. Those two sta­tis­tics aren’t co­in­ci­den­tal. Which makes our cover story on Sil­i­con Valley’s all­woman All Raise group par­tic­u­larly po­tent.

It started with a tip to Konrad from Spark Cap­i­tal gen­eral part­ner Me­gan Quinn that some­thing was afoot. Konrad and co-writer Biz Car­son were there from the be­gin­ning, as an in­dus­try’s women lead­ers moved to change their field from the in­side, with a fo­cus on tan­gi­ble re­sults. “In all of the hours of con­ver­sa­tions we had with the group, there wasn’t a ral­ly­ing cry to de­stroy the pa­tri­archy or talk of how men had put the women down,” Car­son says. “There was ca­ma­raderie, not com­pe­ti­tion.”

“It felt like history was play­ing out be­fore our eyes,” adds Konrad, who notes that he was of­ten the only man in a room of up to 100 power bro­kers. To which Car­son replies: “Wel­come to how women feel!”

For a glimpse into tech’s brighter fu­ture, see page 74.

—ran­dall lane, ChieF Con­tent oF­Fi­Cer

Konrad and Car­son

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