From the Social Science Research Network, May 27:
Abstract
We develop a new ranking algorithm of venture capital (VC) firms and individual VC investors. Our algorithm emphasizes the importance of valuation, dilution, net profits, value add, and human capital decay. For illustration, we apply the methodology to rank the top 100 US-based individual VCs and top 100 US-based VC firms for 2023, drawing on more than 230,000 investments by over 13,000 VCs. Our rankings differ sharply from the Midas list published by Forbes: only 42 of our top 100 individual VCs appear on the 2023 Midas list, and the correlation of rankings among investors ranked in the top-100 by both lists is approximately 0.27. We attempt to replicate the Midas methodology and find significant inconsistencies that cannot be explained by methodological differences alone.
