After long research, Red Herring is releasing its Top 100 Global Venture Capitalists list. This comes as economies have radically changed across the globe, seriously challenging the asset class. Nevertheless, the facts remain: higher relative returns, hundreds of thousands of jobs created, and super-sized brands such as Facebook and Twitter speak volumes. Not to mention the world has been improved through advances in biotech and cleantech. Yet not all venture capital at work has held its side of the bargain and returned sufficient money to its backers, the limited partners. For the LPs, those who manage vast pools of money from pensions and other sources, 2007-2009 will be remembered as the dark years. Fortunately, the Top 100 Global Venture Capitalists represent the best of the group. This group sends checks to their limited partners and holds substantive unrealized value in their portfolios, just waiting for a better exit market.
The Top 100 Global Venture Capitalists list at least demonstrates the qualitative work done by the profession. Most of these 100 firms return money to their LP backers. The ranking methodology is constructed of more than a dozen benchmarks. Among those, we value firms that outpace average returns and build startups from the ground up on a global basis. Red Herring also values stable teams who transition well from one generation of professionals to another. But there’s another, less tangible value that we recognize: those VCs valued by entrepreneurs for their advice and stewardship. As such, we ultimately value the venture platforms that have managed to display and implement a recognizable uniqueness. Then, of course, there are the more quantifiable characteristics such as their global reach. And let’s not forget those firms that hold substantial positions in startups that now exceeded $100 million in sales.
During the past 25 years in venture, household names have been built and the best firms have left their mark. Some will contest our choices. Many will agree that we have chosen a better course than just sifting through historical returns. As most of the Top 100 Global Venture Capitalists know, we have asked the firms to tell us about what they have in store and to divulge information about their best portfolio companies. In doing all that these rankings require, we have seen the difficulties of assembling data, measuring intangible qualities, and comparing different vintage funds from fifteen countries, along with other complexities. We trust that this effort will not only bring more of an insider’s perspective to an industry long misunderstood but also provide more transparency.
Last, we’d like to congratulate an exceptional group of professionals—selected among 1,800 entries—and welcome your feedback. But Red Herring’s Top 100 Global Venture Capitalists list doesn’t stop here. In the coming weeks, the publication plans to profile the top 25 on the list, detailing the next generation of young venture capitalists poised to take charge of the industry. Stay tuned.