We build a basket of "top" VCs we'll use to represent "smart money"

Coming up with a list of the world’s best venture capital firms is not easy.

For one, the life of most funds is 10 years. And funds typically exhibit a J-curve where losing investments fail quickly, often in year two or three, whereas winners typically take seven to ten years to exit.

For the purposes of this newsletter, we’re looking for a basket of “top” VCs to represent “smart money” that we will use to evaluate investing trends in technology and the areas where value creation and change are likely to be greatest.

The typical metrics VCs are measured by include: distribution to paid in capital (DPI), total value to paid in capital (TVPI) and internal rate of return (IRR). Because these metrics vary by fund vintage, take a long time to be useful, are not published (though can be occasionally found in a pension fund limited partner’s annual report), and because we don’t need exact precision for our purposes, we will use the following mechanism to determine our “top” VC basket:

When we use the term “top VCs” in the newsletter, we are referring to the following basket of VC firms (in alphabetical order):

  1. Accel
  2. Andreesen Horowitz
  3. Battery Ventures
  4. Benchmark
  5. Bessemer
  6. DFJ
  7. Felicis Ventures
  8. First Round Capital
  9. Floodgate
  10. Foundation Capital
  11. Founders Fund
  12. General Catalyst
  13. GGV Capital
  14. Greylock
  15. Index Ventures
  16. Khosla Ventures
  17. Kleiner Perkins
  18. New Enterprise Associates (NEA)
  19. Norwest Ventures
  20. Redpoint
  21. Sequoia Capital
  22. Spark Capital
  23. Trinity Ventures
  24. Union Square Ventures