As reported by Dan Primack in PE Hub, Forbes recently announced it would not be compiling a 2009 version of its much-maligned Midas List of Top 100 venture capital investors. And thank goodness for that. I got into a fairly public spat last year with the then-Forbes Editor responsible for the Midas List over my serious criticisms of their version and how they compiled their rankings. My biggest gripe, from my blog post at the time, was that the presence of attorneys, investment bankers and other “service providers” seemed to go against the purpose of the List. The investment banking and venture capital businesses are fundamentally different, so appearing together on a list of “dealmakers” ostensibly “deploying limited partners’ capital to create long-term value” was silly and undermined the value of the List. Investment bankers provide valuable services and deserve to be recognized, but I submit that there are already plenty of other lists to celebrate their accomplishments; a Top 100 VC list is not it.
Coincidentally or not, Tony Perkins’ AlwaysOn has picked up the mantle and pulled together its own list, and that’s a good thing. The AlwaysOn edition, while not perfect, seems to get a good deal closer to the goal of what a list of top venture investors should be. Gone are service providers, investment bankers, and attorneys. Gone, too, are angel investors who are not full-time investors but were fortunate to have been early investors in some of the biggest tech IPOs of the past decade. [Nothing against that, but if these angels are not active full-time backers of start-ups and managing institutional capital from limited partners then this is not the proper forum to celebrate them.] Finally, teased out of the statistics in this year’s list is the “Google effect” — the impact of the Google exit upon venture returns that so severely skewed the results that past years’ lists were inevitably topped by the investors in Google with little regard to other deals that were done in the preceeding 5 years. The evidence of that effect is clear by the deafening absence from this year’s List of one of Google’s principal venture investors and one of the most august names in the industry.
As the name implies, the AlwaysOne Top 100 VC List is of full-time venture capitalists. No doubt there will be snarky comments from the community in the weeks ahead about who received some of the recognition of the new List, whether that recognition was deserved, whether the exits attributed to the investors recognized were indeed funded by those same investors, and so on and so forth. This is to be expected, particularly among a group of professionals that is somewhat renown for having a, ahem, healthy self-image.