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The Midas List? Yeah, sure, & I’m Brad Pitt

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Forbes came out with its annual Midas List, which ranks venture capitalists. Lists on the web are essentially page view machines, but at Forbes, they are a religion. I worked for and know how much work used to go into putting together the Billionaires and the Richest Americans list. So when you see the Midas List, you assume that it is going to be a well thought out and comprehensive listing.

Well, not so much. I looked at the list and found that Fred Wilson, who is one of the most-successful venture capitalists of the post-social era, is listed at #20. Wilson is a general partner at Union Square Ventures, a firm he co-founded, and his investments include Twitter, Etsy, Tumblr and Kickstarter.

He invested in most of these companies during the early stage of their start-up life and long before they became household names and were successes. When investors put money in at this early stage, the returns they get from hit companies are much higher. His return on investment on those dollars is much, much higher than say someone who invested in Twitter at, say, a $3.7 billion valuation. I don’t know, say, John Doerr, for example, who is ranked at the #12 spot.

“Everyone in the industry knows USV is the top VC, so any ‘top list’ like Forbes that doesn’t include them is a joke,” tweeted Chris Dixon, an entrepreneur and partner at the Founder Collective. David Lee, who works with Ron Conway at SV Angel, added, “It’s like putting Andrew Luck at #20 in an NFL mock draft.” Bijan Sabet, who incidentally is #57 on the list and has invested in Twitter and Tumblr, added, “Also list doesn’t take into account cost basis or ownership.”

The point is not to defend or talk-up Fred Wilson — he can do that himself on his blog, and frankly he doesn’t need to. The reason for bringing him up is that the list’s methodology is just weird and, well, ambiguous at best.

Do Forbes and its partners take take into account how much money was invested in Skype and how much of it was actually returned to the limited partners at Andreessen Horowitz? And how do they explain that Mary Meeker is on the list at #42 (ahead of say, Sabet), even though she has been in the business for — wait for the drum roll — 17 months. And well, if we are going to include Meeker on the list, then why not Brad Feld from The Foundry Group, who was an early investor in Zynga, one of the hot investments?

To be clear, I am not commenting on individuals, but more on the Forbes methodology:

For the Midas List, we created our data-based rankings again this year with TrueBridge Capital Partners, a venture capital-focused fund of funds. Also advising us on our final ranking was an expert panel made up of secret sources, including professionals from a premier global investment consulting firm and a leading foundation’s investment office.

The aim of the Midas List ranking is to identify the venture capitalists who are providing the best returns for their investors, while helping create the most valuable and impactful technology and life science companies. To assess performance, we looked at all venture-backed initial public offerings and mergers and acquisitions valued at more than $200 million over the last five years, since 2007.

When I worked at, I got to know a lot of people who worked on Forbes’ lists. There was a dedicated team that worked around the year and dug up little-known facts and details before assembling the final tally of America’s Richest or the Billionaires’ list. The effort that went into those lists was so comprehensive that you could take it to the bank. The  methodology for the Midas List, based  on Forbes’ own description above, is nowhere close to having that rigor. So, if Forbes is serious about this list, it needs to devote resources to it.

17 Responses to “The Midas List? Yeah, sure, & I’m Brad Pitt”

    • Not sure I want to make another list here, Gareth :-) I would like to see Forbes get more serious about this list and actually do more in-depth reporting to make this is a good list, just as it used to be.

      • Gareth Wong

        I can understand fully.. for list as such, IMHO, the creator need to take full ownership, and really be part of the ‘system’ to be able to ‘make the call’ and make and defend the list.. most employee would not be able to do it.. (for those that could, would probably decide to start his/her own list)..

        being able to ‘stay’ the course, and work with others is not a Tech issue, I asked similar question to Lord Green (ex Chairman of HSBC) regarding regulations in the financial sector worldwide… interesting to hear how he skillfully answered the question:

        doing such a list is a thankless task.. but a brilliantly intellectually challenging but maybe rewarding one (a potential career) for some.. ;-)


  1. Bruce Upbin

    Hi Om,
    Thanks for taking the time to read through the Midas List and the methodology. It’s an imperfect list and always was, just like the 400 and the Billionaires lists are imperfect, incomplete and always were. But I don’t think you can argue it’s bullshit, weak or deeply flawed. I asked a dozen or so VCs what they thought about the old list and they mostly laughed at what happened to it over time. They gave us some good advice which we aggregated into a new approach with TrueBridge. The flaws in years past (even the years you worked at were that the methodology was overcomplicated, suffered from false precision and had the appearance of being under the influence of the whims of an editor. So we took a cleaner, more purely data-driven approach this time around built around the only clean data we had: exits and who got in when. The biggest flaw is that we don’t know what pre- or post-money valuations are for enough rounds to make cost basis a consistent data point. It would be awesome if we had that confirmed for each deal. Do you want to work on that with us next year? We could spend all year just investigating cost bases for 100s of deals..and would the list look that much different? I doubt it.

    The methodology gives Fred Wilson credit for being early in his start-ups. The amount we give VCs for their exits is discounted higher the later they get in. So Fred gets more for his buck in Twitter than KPCB does. Doerr is higher for other reasons than Twitter.

  2. You seriously don’t know who John Doerr is? He keeps a low profile, but he’s one of the most successful VCs of the last 30 years. Ask Marc Andreesen about him – Doerr invested in Netscape.

    • Actually “D” where does in the story does it say I don’t know John Doerr. And no, he doesn’t keep a low profile. I think now Marc does a better job in the PR business.

      The point is that he hasn’t had a high-return investment like Netscape in a long long time and to put him ahead of investors who have a track record that is better than him since “2007” the cut off date by Forbes.

      • Fine, it was a joke that went over my head. You could’ve said that the first time instead of asking “where does in the story does it say I don’t know John Doerr”

        FWIW Doerr is an early investor in Twitter and Square and is on the board of Groupon. He’s also done a lot of life science investing that gets less attention.

  3. Seth Goldstein

    Seth Goldstein ‎+1. who would you rather have lead your series A (or invest your LP money) than Fred Wilson? Its kind of like asking, “which QB would you pick to start your superbowl?” There are four or five equally good answers (Brady, Brees, Rogers, Manning/s) but in the end it comes down to chemistry and personal taste.

  4. Om, since the complaint is around methodology, and the salient methodology point is, “To assess performance, we looked at all venture-backed initial public offerings and mergers and acquisitions valued at more than $200 million over the last five years, since 2007.”

    Are you saying that’s a bad methodology or that Forbes didn’t execute it accurately?

    I don’t have a hard time believing Forbes executed that methodology accurately–it isn’t that hard as the information needed is a matter of public record.

    What’s murky and very difficult to assess are things like how many bad investments a particular fund made that lost capital and offset those wins.

    Nevertheless, there is some kind of merit in who is getting the most public and acquisition top line return back to the fund.



  5. cdixon

    The real problem with these wildly inaccurate lists is they reinforce behavior that is specifically designed to manipulate the press. Example: “buying posters” = buying shares in super late stage companies (sometimes on secondary markets) in order to put the logo on the VC’s website. The press doesn’t know or doesn’t bother to figure this out, and then put, say, Peter Thiel (who invested in FB super early stage) and Kleiner (who bought secondary shares at >$50B valuation) in the same bucket.

    • Chris,

      Totally agree and I have been railing against this forever. I think it is just lack of real nuances which is causing this list to be all over the place. I knew some of the founder/editors of this list and the rigor then was much much higher.