Watch Pando play "Fantasy Series A"
Last year, CB Insights designed a bracket to pit unicorn against unicorn to determine who is the most underrated at current valuations... or perhaps who might be the least over-valued. I detailed my picks here.
My ultimate winners were SpaceX and Palantir— two truly differentiated companies that don’t compete on price, overpay to acquire customers, or fit into any discernible fad. Two actual technology companies. The spawns of two of the most impressive entrepreneurs and investors of the era: Peter Thiel and Elon Musk. The ultimate triumph of the PayPal Mafia.
CB Insights' audience picked... Domo.
This year, just in time for March Madness, CB Insights has designed a bracket to determine the most desired VC to lead a Series A.
I hesitated to weigh in on this one because it’s inherently more personal. You can believe in Elon Musk but still think SpaceX is a dud. Or you can love Uber but think Travis Kalanick is a monster of a human being. Or you can love both but simply think the current valuation is too high relative to say, Lyft or Slack.
But who you would raise a Series A from is much more personal and it hits at VCs where they live. It’s one thing to rank VCs by exit. A single deal like WhatsApp can sway results for a decade. But this gets at sentiment. And that equals deal flow and ego.
Also, as an entrepreneur myself who has raised $4 million in venture capital, I have my own biases. Do I need more people in the Valley mad at me? Over a stupid bracket?
Apparently yes, because here we go. There are a jillion names so I’ll do the left side today and the right side tomorrow. As usual I am getting to this after the first round of voting is done. So I’ll give my picks and the picks of the crowd.
Sequoia V. Slow: While last year, CB Insights seemed to try to match like companies against each other in early rounds, this time they are putting Davids against Goliaths seemingly trying to weed out the small ones first. I have mixed feelings when it comes to Sequoia, and wrote about some of the Valley’s concerns around their track record with women a few weeks ago. Still, there’s no way you don’t pick the most powerful firm in Valley history to lead your series A if you have the chance against a smaller, unproven firm that many may not have even heard of. Mean, CB Insights. Mean.
My Pick: Sequoia
Crowd Pick: Sequoia
BV v. DFJ: It’s the battle of the 90s! Both of these firms were stronger then, so this is a pretty fair matching. I’d pick BV, mostly because I was so utterly turned off by Tim Draper’s judgement in his silly reality show, ultimately picking an entitled dude from family money who had no idea how to build something as his “winner” over actual companies. Also he made his “students” recite a creepy libertarian pledge everyday. If that’s the “value add” of DFJ, no thanks.
My Pick: BV
Crowd Pick: BV
Matrix v. Qualcomm: I’m going with Matrix. I don’t know their partners well but they seem nice enough and smart. And I’ll take a classic VC firm over a corporate VC arm with no other info to go on.
My Pick: Matrix
Crowd Pick: Matrix
Founders Fund v. Venrock: I have already raised money from Founders Fund and —more telling— I would again. (I can’t say that for all our investors.) I think they genuinely think differently than the typical VC group think and have always done the little things like participating in future rounds, returning calls quickly and returning paperwork quickly. And they just raised another $1 billion. Like a lot of the “Remember the 90s?” firms Venrock’s best days are mostly behind it.
My Pick: Founders Fund
Crowd Pick: Founders Fund
Intel capital v. Felicis Ventures: I don’t know much about Felicis Ventures but isn’t Intel Capital selling off its portfolio? That seems easy.
My Pick: Felicia Ventures
Crowd Pick: Intel Capital
General Catalyst v. Harrison Mertel?: GC moves mega amounts of money around so if you want someone with deep pockets for later rounds, they are clearly the pick. Also Kevin Coleman is one of the funnier people you’ll ever meet. Gallows humor can go a long way to diffuse board awkwardness.
My Pick: General Catalyst
Crowd Pick: General Catalyst
Floodgate v Mayfield: Another time-traveling matchup. Unfortunately for Mayfield, Floodgate is one of the original and best of the so called “institutional seed funds.” Floodgate is probably the only firm I don’t count as an investor that I wish I did. Not only do they hunt for big deals, a lot of their companies don’t seem to get tied up in the silly my valuations is bigger than your valuation game. It’s a firm with more women than men. And Mike Maples is the “honey badger of VCs.” He will say it like it is, totally and utterly not giving a shit.
My Pick: Floodgate
Crowd Pick: Floodgate
GV v. Salesforce Ventures: I anticipate I am gonna part ways with a lot of the crowd on this one, but I’m going Salesforce. I don’t know a ton about their venture arm and there are many reasons to generally not trust corporates’ intentions and commitment. That’s pretty scary at a stage like Series A. And GV has distinguished itself as the “not all corporates” corporate investing poster child. That said they have a bizarre track record when it comes to everything but investing. The weird “we love Secret but think Bustle is a morally compromised company” thing was at best hypocritical and could have killed a portfolio company if Bustle had been weaker or had other investors who were less committed. Then there’s the whole “WE TOLD YOU SO!” revisionist history of both Secret and Theranos… well after both companies had already stumbled. Not classy. The most basic thing you need in a Series A investor is to know that at least publicly they’ll support you or at the very least publicly not trash you. It’s the VC equivalent of having a pulse and not drooling on yourself. Salesforce.
My Pick: Salesforce Ventures
Crowd Pick: GV
A16Z v. Homebrew: I haven’t raised money from Andreessen Horowitz but I have raised money from Marc Andreessen and he’s been one of the most responsive, most supportive of all of my investors. I like Hunter Walk, but this is a bit like Sequoia and Slow Ventures match up. It’s obviously A16Z.
My Pick: Andreessen Horowitz
Crowd Pick: Andreessen Horowitz
Emergence v Bain: This depends a bit on what you are building as Emergence only does SAAS companies. But if you are doing a SAAS company, there’s arguably no one better to have as part of a syndicate. They bet the house on this category back in the early days of Salesforce.com. They deeply deeply know the ins and outs of building these kinds of companies and sales forces. Can’t see a Benefits happening on their watch. They aren’t tourists and won’t throw you over for a flashier consumer deal. They’d meaningfully help with things like recruitment and maybe even customers. There’s much more of a playbook for building a SAAS company and they know it better than most.
My Pick: Emergence
Crowd Pick: Bain Capital
NEA v DCM: DCM like a lot of firms on this list used to be a bigger deal. NEA has mostly consistently stayed the same thing: The first mega fund and only mega fund that stayed a mega fund in the dot com crash and is still a mega fund today. As a mega fund there’s some massive inconsistency in partner quality and track record. But they have the cash, aren’t going anywhere and a lot of great talent. Wouldn’t be top of my list, but you could do a lot worse than NEA leading your Series A.
My Pick: NEA
Crowd Pick: NEA
CRV v Menlo: Are you sitting down? I don’t have strong feelings on this one. I like both firms, but am not super close to the current partnerships. I probably know George Zachary of CRV the best, and like him so I’d give CRV the edge.
My Pick: CRV
Crowd Pick: Menlo
Social Capital v. Canaan: Chamath Palihapitiya is a honey badger in training. Smart, outspoken, unafraid to go his own way, and call people out. He wins just because of that. But he also gets loyalty points because he was the VC who didn’t act like GV in the whole Bustle thing. That counts for a lot at Series A, because even great companies are going to have ups and downs.
My Pick: Social Capital
Crowd Pick: Social Capital
KPCB v. Lowercase: I expect I’ll part ways with the masses here as well, but I’m picking KP. Yes, their better days may be behind them. But unlike a lot of companies on this list, KP’s better days were astoundingly great. They still have a lot of mojo and John Doerr and Mary Meeker are two of the best minds in the Valley, not to mention extraordinarily well connected ones. KP can suck for a few decades and still raise a fund. That said, there’s a lot of disarray in the partnership. Having a partner on your board who may not have sway in the partnership can be a kiss of death.
That said. There is one truism in venture capital that everyone will tell you: Pick your VC by talking to companies where things didn’t go well. Especially at Series A where so much is uncertain and so much of the journey is ahead of you. Chris Sacca is the only investor I know where people no longer speak to him at the companies where everything has gone well. I don’t care what his ranking is because he got in Twitter and Uber. He may be the only person in the world that Travis Kalanick and I agree on.
My Pick: KPCB
Crowd Pick: Lowercase Capital
Index v. Norwest: I’ve always liked the Index partners. I think Danny Rimer is one of the more underrated thinkers and I’ve never heard a bad word about him as an investor. I like that Index doesn’t try to peacock around, trying to assert its dominance, rather it just partners with a lot of firms. It hasn’t always had the best picks of late— Secret, Frontback, Path— but has its share of hits and has a global footprint that could be useful to a company in future years.
My Pick: Index
Crowd Pick: Index
Greylock v Baseline: Like Founders Fund Greylock is a company that I have and would again raise money from. My favorite thing about Greylock is that they have a high bar for not funding assholes, even if that means they miss out on the best company of an era. And yet they still manage to remain a top firm. Maybe their LPs don’t always appreciate that, but I do
My Pick: Greylock
Crowd Pick: Greylock
Tomorrow: Round two!