Welcome back to this week’s transcribed edition of Equity, TechCrunch’s venture capital-focused podcast that unpacks the numbers behind the headlines. Here we put the words of our wildly popular venture capital podcast, Equity, into Extra Crunch members’ eyes instead of their ears. This week, TechCrunch’s Kate Clark and Crunchbase News’s Alex Wilhelm get rapid-fire on funding news from around the way. And because they both talk so fast, they got a lot in.
In case you hadn’t heard, Andreessen Horowitz relinquished its status as a venture capital firm and registered all 150 of its employees as financial advisors. Kate and Alex dug in a bit more about that story. And who is sick of hearing about Lyft’s IPO? Nobody? Great. Because they talked about that and the implications of Uber’s imminent journey into the land of the public.
And finally, the Midas List. Does it matter? Why are we talking about it? Why do lists exist? Who’s on top? Who’s not? Who’s sad? Who cares? And more questions left unanswered.
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Kate Clark: Hello, welcome back to Equity. I’m TechCrunch’s Kate Clark and I’m joined again this week with Crunch Base News’ Alex Wilhelm.
Alex Wilhelm: Hello Kate. Good to be back in the studio.
Kate Clark: Welcome back. It’s just Alex and I this week and we have a lot of news to get through. So we’re just gonna start off by doing a rapid-fire overview of some of the stuff we’re not going to go as deep on. Alex, start us off with Affirm.
Affirm founder Max Levchin
Alex Wilhelm: Yeah, so if you haven’t heard about Affirm, it’s a company that was I believe co-founded or founded by Max Levchin, who is most famous for being part of the PayPal Mafia, which is the group of people that left PayPal and did very well since then. You know all of them by name. But what’s cool about Affirm is, they raised, according to Axios, a $300 million round at what Axios claims is a $2.9 billion post-money valuation. This raised my interest, because I couldn’t recall how much money they’d raised to date, and I couldn’t tell if $300 million was a lot or not a lot. So according to the math that I’ve done, and of course fact checking please, they have raised, before this $620 million in equity funding, and $100 million in debt. So it’s a lot of money they put on their balance sheet, but they do run a consumer credit thing, so they probably need a lot of capital around. But it’s another endorsement of what Max is up to and the Affirm team, and I thought it was a notable moment in the week’s venture capital landscape.
Alex Wilhelm: Speaking of which, Clearbanc, with no K is also in the news. Kate, what is going on with our friends over there?
Kate Clark: Yes, Clearbanc with a C, this is a startup that wants to provide other startups alternative ways of raising capital to scale their businesses that don’t eat up equity. So, of course you all know, when you raise a VC round, you lose equity. So a lot of these companies, when they eventually get to the IPO stage, they don’t own much of their company. So Clearbanc has this idea that, if they fund startups, particularly those in the e-commerce spaces that spend a lot of money on ad spend, if they fund them with this non-dilative capital, then when they do go public they’ll own a lot of their company. So this week, they launched a campaign called the 20 Minute Term Sheet.
Alex Wilhelm: It’s a good name.
Kate Clark: It is. It is a good name. It’s catchy. They said they’re going to fund 2,000 e-commerce businesses with $1 billion in 2019. I just want to clarify one thing, because I was really curious as to how they got that much money so fast. They don’t have all that money just sitting in a pile in their offices. Because they recycle and deploy capital because they do these revenue shares, they’re going to have $1 billion throughout the year, but they don’t have a pool of $1 billion.
Alex Wilhelm: Okay. So this works out like, I’m an e-commerce business. I spend a bunch of money on Google ads or Facebook ads, whatever. I don’t want to use money that I raised by selling equity on that. I raised money from Clearbanc, and then I pay them back as part of the rev share breakdown.
Kate Clark: Right. Exactly. So you pay them back 106%, and then they take a portion of your revenues every single month. And the portion depends on how much money they’ve given you. And they give anywhere between $10,000 and $10 million, and they’ll follow on. They’ll continue investing in you if you’re growing, as long as you have positive unit economics and positive ad spend, then you’re green lit. So, they just use an algorithm, essentially it looks at your revenue data, financial data, and then decides if your trajectory is good and that’s that. The whole thing takes 20 minutes. You get your money within 48 hours.
Alex Wilhelm: I wonder how they fact check the unit economics stuff. I’m very curious.
Kate Clark: I mean, I’m curious, too. I think there’s a lot of risk associated with what they’re doing. And they sort of acknowledged that, but they were also like, “Well, we did it 150 times last year, and it’s working out.”
Alex Wilhelm: I guess I’m just wrong, then.
Kate Clark: We’ll see.
Alex Wilhelm: Well, I would love to see the math behind that. But I do like the idea of giving companies a way to spend on ads and not spend equity financing to do it, because it’s so expensive.
Kate Clark: Yeah. And also one thing that’s kind of cool about it is, they’re very excited about being co-investors with these VC firms, so if you are a startup raising $10 million, they’ll give you $5 million and you can spend that on ad spend. You can spend that on your Facebook and Google campaigns. Then your equity funding that you still need, you can use that to scale in other ways.
Alex Wilhelm: Right. So you can put the equity funding into paying your people, and you can use the Clearbanc money to go ahead and fund your ad spend. And you walk out a bit more efficient than you would have been taking a full equity check.
Kate Clark: A bit, yes.
Alex Wilhelm: All right.
Kate Clark: So let’s see, next thing. Rippling. What’s up with them?
Alex Wilhelm: Ah, so if you are in San Francisco, you have seen the billboards and the signs. If you are not, you have not, but Rippling is a company that raised, I have the numbers here, $45 million out this week. I believe it is a YC graduate?
Kate Clark: Yep.
Alex Wilhelm: I really should …
Kate Clark: No, yes it is.
Alex Wilhelm: That’s why I love having you on the show. Thank you for being here. If you don’t recall the name Parker Conrad, let us remind you, he was infamous, I believe from the Zenefits early days in which they were growing like mad, then Zenefits ran into some regulatory issues. There were also a bunch of culture issues. And Parker Conrad’s name became, you know, not great for a long period of time there.
Kate Clark: Yeah.
Alex Wilhelm: And now, he’s back. They’ve been working on this project for about two years, and according to TechCrunch.com, 40 engineers were working in stealth to build this out. My understanding is that it’s kind of single-click onboarding for new employees. Now, if you haven’t ever hired people, you might not know how hard this is, but there’s a lot of paperwork and a lot of details that go into that to get people onboarded, plug in the payroll, plug into other systems. It takes ages.
Kate Clark: Yeah. I’ve heard this from a few conversations this week, that there are a lot of investors that are really excited about this and who wanted to get in on this company. So I think it’s probably going to go places.
Alex Wilhelm: Yeah. So, Parker Conrad from down to up to down to up, and as I said on Twitter, “Tech is a flat circle and everything comes around again.” So here we have Parker Conrad working in HR, raising a bunch of money and having a hot company, because five years ago wasn’t enough. We’re back. Okay, and this actually brings us to a more fun category, so fintech. Kate, what is going on, and why is there $1 billion written down in our notes?
Kate Clark: You mean femtech? Because it sounded like you said fintech.
Alex Wilhelm: I definitely meant femtech, but that actually may be a problem with the phrase and that we discovered that. Anyways, femtech, what’s going on?
Kate Clark: All right. So I was writing up yet another round in the femtech space, because I follow it pretty closely. This time, it was a organic tampons, direct to consumer startup. I was looking into some data around femtech, and I noticed that this year is already on pace to hit $1 billion in venture capital funding for femtech, which is a huge deal, because the record is $600 million or just above, and that was last year. So we’re taking a huge leap forward this year, and that’s just great to see.
Alex Wilhelm: Is that a US number, or a global number?
Kate Clark: This is global.
Alex Wilhelm: Okay.
Kate Clark: But most activity in femtech is in the US.
Alex Wilhelm: Right. Not surprised about that, but $1 billion would be … That’s two-thirds more than last year if it was compared to $1 billion.
Kate Clark: And I don’t have the exact numbers memorized, but like in 2012, 2014, 2016 it was always never higher than maybe $220 million. So we’re seeing significant growth very quickly. So it’s nice to see that.
Alex Wilhelm: Well, it turns out women have money and buy things.
Kate Clark: It does turn out that way, and investors are finally seeing, like there’s really big opportunities here.
Alex Wilhelm: Was that the core out round you were talking about?
Kate Clark: That was. And there was also Elvie this week, and Elvie raised … Elvie’s a breast pump startup.
Alex Wilhelm: Mm-hmm.
Kate Clark: They raised $42 million, and they claimed that at the time in their press release, they claimed that was the largest ever round for FemTech. I don’t actually think that’s true, but it’s definitely top five.
Alex Wilhelm: This was the no noise pumping startup. Yeah.
Kate Clark: Yeah.
Alex Wilhelm: It’s a big point of discussion on our back channel, because we have a bunch of moms in the country’s news team, and they were like, “Where was this?”
Kate Clark: Mm-hmm.
Alex Wilhelm: So obviously a big market for that.
Kate Clark: Definitely.
Alex Wilhelm: But, we promised to be quick. So scooting along, Okta has joined the cool kids club and has a fund.
Kate Clark: Yep, Okta has a new fund called Okta Ventures, a $50 million fund. They’re going to essentially invest in startups in their ecosystem, startups they’ve already partnered with and who they want to see grow. However, their first investment was actually in a blockchain startup, which is not …
Alex Wilhelm: Excuse me?
Kate Clark: Yeah. You know, blockchain’s hot.
Alex Wilhelm: Is it, though? Is it still hot?
Kate Clark: No. That’s true.
Alex Wilhelm: No. Yeah.
Kate Clark: Well, it was hot. And not to be … It’s Okta Venture. I mean, I don’t …
Alex Wilhelm: I don’t even know … I think there was a lot of diss in that sentence.
Kate Clark: Yeah, I kind of reverted. But they did invest in a company called Trusted Key.
Alex Wilhelm: Okay.
Kate Clark: I don’t know, exactly. I don’t remember what it does. I’m sorry.
Alex Wilhelm: What we wanted to point out wasn’t just that Okta, itself has a fund, which is neat. $50 million isn’t a huge bucket of money, but of course, their ecosystem isn’t as big as Microsoft’s for example. But there’s been a number of other corporate venture capital rounds that we’ve noticed, and we kind of want to call out a couple of those deals. And one point to Natasha on my team for covering this for me over the last couple weeks. But recently, Intel Capital announced they had put $117 million into 14 different startups, but one big announcement. Chevron put together a $90 million fund, which I thought was weird. Chipotle has an accelerator, now, but it’s through the Chipotle Foundation of some variety, so they can’t give out actual money.
Kate Clark: That is so funny.
Alex Wilhelm: Yeah, I don’t … Chipotle, not good food. Maybe it’s good startups. Who knows. Starbucks has a fund, and there’s other funds in the pipeline, according to you, Kate, so I’m just kind of surprised at how much we’re seeing in this window of time.
Kate Clark: Yeah. I was just going to say, how much impact do you think these funds have? Like $50 million is not a lot for a fund. They want to invest in like 10 companies. In one year, do you think that they will have a big impact on their ecosystem?
Alex Wilhelm: They could. I mean, all you need to do is increase the flow of companies inside your space to drive more adoption of your product, make it more useful to provide more value. So if you’re Okta, this is probably a pretty efficient way to make your overall product environment better. I like it.
Kate Clark: Are we saying Okta right?
Alex Wilhelm: Okta.
Kate Clark: Okta?
Alex Wilhelm: Is it Okta?
Kate Clark: I don’t know. But I do know that I’ve said it wrong before. Okay, so I’m sorry if we said it wrong.
Alex Wilhelm: I think I … I’ll take the blame.
Kate Clark: I might have said it … No.
Alex Wilhelm: If it’s not Okta, it should be Okta, because that’s how it’s spelled.
Kate Clark: Okay. Well, let’s move on. Now we have to get to some actual topics. We’ve already wasted a lot of time.
Alex Wilhelm: Sorry. That wasn’t as fast as we thought it was going to be.
Kate Clark: It wasn’t.
Alex Wilhelm: it turns out we can’t really shut up. But Kate is going to talk us through a very important story this week from another oddly-named fund, which is A16Z, or Andreessen Horowitz. They are the cover story this week, if you will.
Kate Clark: Yeah, so Forbes, and if you follow VCI, you’ve probably read the story. Forbes did this great cover story on Andreessen Horowitz and some changes going on at this firm, which is one of the most well-known and most successful firms in the world. What they’ve done is, they’ve decided to give up their status as a VC firm, and they’ve registered all of their 150 employees investors financial advisors. So basically they’re doing this, and this is a quote from the story, “to go deeper on riskier bets. If the firm wants to put $1 billion to crypto currencies or buy unlimited shares in public companies or from other investors, they can.” So, VCs have typically had these agreements with our limited partners. That puts a 20% cap on these risky activities like public markets, purchasing shares in the public markets, buying a ton of crypto currency, or issuing debt to fund buyouts, or acquiring equity through secondary transactions. So by registering themselves as a financial advisor, they’re giving themselves a lot more freedom to make these bets, which is essentially just diversification.
Alex Wilhelm: But, they’re also telling their future LPs by doing this that they are going to take a more aggressive tack. They are not going to be constrained by traditional venture capital risk profiles. They’re going to go to infinity and beyond.
Kate Clark: Yes. I mean, it’ll be interesting to actually watch and see how they change, and whether they can behave differently, or if this is just a little bit more of a symbolic gesture that’s Andreessen taking a stand and saying, “Hey, we’re still the most innovative, we’re still the riskiest.” Because you know, years ago they became the first big firm that would provide services to their portfolio companies, as well as capital. So back in the day, VCs gave you money, but they didn’t necessarily help you with PR or help you with building your product, like giving you these advisory services that looking back it seems crazy they didn’t do that, but now most firms do. So Andreessen sort of took the lead there. And this either is truly meaningful and we’ll see it play out as being something like very significant, or it’s just a little bit more of a, “Hey, we’re still the coolest guys on the block.”
Alex Wilhelm: Well, Andreessen, as leader of the pack, if you will, came in a number of different ways, because they also raised bigger funds than anyone else. I recall when Andreessen did their first $1 billion fund, it was almost kind of a joke. Everyone thought, “How the hell are you going to return three to five to six X on $1 billion? Are there enough Xs in the world to power that? Now, the Vision Fund wants another $15 billion on top of the 100. We’re not actually get that today, that’s just a data point. So, Andreessen kicked off a wave in the broader capital landscape. They also changed venture in the services, the way that Kate mentioned. Here, they’re almost leaving the farm altogether and walking their own path.
Kate Clark: So they say.
Alex Wilhelm: Well, yeah.
Kate Clark: I don’t know. You know, I haven’t seen this happen before. I don’t know what it’s going to mean. But another thing that’s interesting to point out is that Andreessen, like I mentioned a few minutes ago, 150 people, it’s massive. It’s like a company, not a firm. Which a lot of UC firms are like eight people. And just a couple months ago, Andreessen hired their 15th general partner. They have the most general partners of any firm. I mean, 15 general partners, that’s like … That could be 15 VC firms.
Alex Wilhelm: That’s a football team.
Kate Clark: Is it?
Alex Wilhelm: I don’t know, actually. Do you need like 10 people on the field?
Kate Clark: I have no idea.
Alex Wilhelm: I haven’t played since seventh grade, and that was some time ago. Anyways, 15 GPs is a lot of GPs.
Kate Clark: It’s a lot of GPs. And okay, let’s see, there’s also just a few things I want to pull out from the story, as well as the big news which was that they became a financial advisor. They’re in the process of raising a $2 billion fund. I think max, $2.5 billion. There’s a really interesting bit in there. I don’t know if you read it, but on how they missed out on Uber.
Alex Wilhelm: I did, yeah.
Kate Clark: So, I mean, a lot of people missed out on Uber. But apparently, they came very close to leading a round, and they had a valuation. They wanted to discount the valuation, and Uber was like … I mean, it was Travis, so …
Alex Wilhelm: Did Travis say no to that? I’m shocked.
Kate Clark: Travis … Uber walked away, yeah, and went to Menlo Ventures, who had been just offering a higher valuation.
Alex Wilhelm: Yeah. And Menlo Ventures did pretty dang well. If I recall, the numbers of like 100x or something on that investment? Something crazy like that. But we should be fair to other players in the now former venture capital space because I think General Catalyst is also moving towards this model of being financial advisors, and I would be very surprised if we did not see other people do this as well. Because if Andreessen ‘s going to go and take the gloves off, you can afford to play with gloves on. You know, they’re going to go out there, they’re going to push harder. You need to keep up, because you’re going to be compared to their returns. You can’t avoid the comparison.
Kate Clark: Yeah. I wonder if it’s going to be this thing where all the firms start doing it, and it’s like this really big story in 2019 where all the venture capital firms became financial advisors. But then in seven years or five years, we look back and nothing’s different.
Alex Wilhelm: Well, I mean we had capital as a service that came and went. We had the …
Kate Clark: That’s still happening. I mean, that’s like what Clearbanc’s doing, basically.
Alex Wilhelm: Right, but I mean just in the Social Capital sense.
Kate Clark: Right.
Alex Wilhelm: And that, too.
Kate Clark: Oh, and actually I should say Social Capital is an investor in Clearbanc.
Alex Wilhelm: Oh, well … Oh, they outsourced their model. Brilliant. That’s one way to do it. I was going to outsource doing the show, like Chris, you want to take on? But we’ve also heard other things that have gone big in the financing space, and then gone caput. Like ICOs were like the hot thing. They were going to take over VC for like 18 minutes, and now they’re down to effectively zero. Stable coins, the same thing. So these new innovations come up, but venture capital has proved durable since the ’80s, and that’s a shocking amount of time for one kind of approach to capital to persist, even throughout all the change that happened. So maybe this is the future, maybe it’s just Andreessen being Andreessen Horowitz, you know? Yeah. All right, let’s move on to everyone’s favorite company. Kate, do you want to talk more about Lyft?
Kate Clark: Do I want to talk more about Lyft? No. I don’t, but I will.
Alex Wilhelm: Okay. Fair enough.
Kate Clark: I seem to not be able to escape Lyft conversations. Like everywhere I go, even in Uber rides with Uber drivers, they’re like, “What do you think of Lyft stock?”
Alex Wilhelm: I don’t have an opinion, really.
Kate Clark: Yeah. I don’t know anything about that.
Alex Wilhelm: And the market doesn’t either, because it’s almost back to its IPO price after some fascinating gyrations, because I think as you reported on the last Equity shot, the shares were up. They opened at 87.24, went public at 72. It looked like bam, a fantastic introduction to public markets. But then …
Kate Clark: Yeah, it did. I think when we recorded that shot it was up 20%, big IPO pop. We’re like, “Wow, look at it go.” It’s since dropped down quite a bit, though today, it’s actually hovering around, like you just mentioned, it’s hovering around it’s IPO price. I know you think now the IPO was priced very, very well.
Alex Wilhelm: Should I explain why I think that?
Kate Clark: Yeah, I think you should.
Alex Wilhelm: Okay, so they had an initial range of $62 to $68 a share if I remember correctly. They raised that up to $70 to $72, which is a pretty tight IPO range, really. It’s not uncommon to see raised ranges be a bit more narrow, but that’s what they were shooting for. They got exactly the top of that, $72, and then on the first day they looked a bit underpriced if you are conservative about IPO pops, which is the first day jump on a new offering. But to have them drop down to like $66-67 and then come back to $72 roughly shows that the market’s balancing out, at least as far as we can tell, right around the IPO price, which means they raised about every single dollar they could in their IPO. They didn’t leave a lot of money on the table. In fact, it looks like they left none. So, if you are in the mood to raise money, and Lyft consumes tons of cash, as we discussed, they did very well.
Kate Clark: Yeah. I just want to give you credit, because we debated this last week, I think, when we were talking about IPO pricing and I was like, “They’re leaving money on the table. And you were like, “They’re not leaving any money on the table.” You were right.
Alex Wilhelm: This is the first time either one of us have been right on equity in like months.
Kate Clark: That’s true. So I mean, at least one of us has a good track record.
Alex Wilhelm: No, one out of 45 versus zero out of 45 is not exactly.
Kate Clark: I’m going to get something. I’ll have all my predictions right about the Uber IPO. Actually, here’s one prediction. I think they’re going to file not next week, but the week after. They’re going to drop there.
Alex Wilhelm: So that would be the week of the 12th? I think?
Kate Clark: No.
Alex Wilhelm: Can we calendar that?
Kate Clark: It’s April 4th right now.
Alex Wilhelm: It is April 4th.
Kate Clark: Week of the 16th …
Alex Wilhelm: Ladies and gentlemen, this is why people put calendars on the wall. Sadly, in the TC studio, there is not a calendar on the wall. So the third week of April.
Kate Clark: Yes.
Alex Wilhelm: Okay. Whatever that is.
Kate Clark: So if I’m right, then good for me.
Alex Wilhelm: I want to throw one more thing on the Lyft barbecue before we move on, which is that this is less bullish for other unicorns than it was. When Lyft had a 20% pop, given its growth and losses, it seemed to bode well for high-burned unicorns. Now it has come back a bit. It’s slightly less bullish. It is still, I think overall, a bullish debut for the company.
Kate Clark: And I want to also add one thing.
Alex Wilhelm: Please.
Kate Clark: Just to explain why there’s been a lot of volatility. A lot of people are shorting Lyft stock because they think that it’s going to continue falling. So it’s just, I mean, it doesn’t feel like a lot of people are actually talking about why it’s volatile, but I was just reading before we taped that they’re shorting more than 38% of the shares. So there are a lot of people that are going in and like just betting against the stock, which is good for them, because they get a profit when the stock falls. But it’s not good for Lyft.
Alex Wilhelm: No. Or any other unicorn that wants to go public. I mean, Lyft is really carrying the flag right now for everybody, for better or for worse. But that’s just kind of who the center bear is today.
Kate Clark: Yeah. So people are betting against them. But anyway, let’s move on. Alex, I know you’re really, really, really excited about Jumia’s IPO, so tell us, what is Jumia, and what’s going on with their S1?
Alex Wilhelm: So, I hadn’t heard of Jumia, which is an embarrassing moment. When a company goes public and they’re in the tech space, I should have heard of them before, is my general rule of thumb. This is an S1 that I literally opened cold, and thought, “Okay, who’s this?”
Kate Clark: Opened cold.
Alex Wilhelm: Maybe I could find a better phrase than that, but I had no contacts going in, and it turns out Jumia is a company that’s been around for some time. They’re in a sense kind of the Amazon of Africa. They do eCommerce and they do logistics and they do last-minute deliveries, and they’re a super fascinating company that is growing pretty, pretty quickly. They grew 38.9% from 2017 to 2018, ending up with $130.6 million euro in revenue for that year. Sadly, they’re also wildly unprofitable. They lost $170.4 million euro that year. And that’s a phrase, loss for the year, as opposed to net loss. Which is an interesting way to approach reporting DAT numbers, but it’s a really cool company. I just feel like we should do more on this show about international companies. We get a little bit too caught up in literally what’s in Sonoma where we are.
Kate Clark: That’s true.
Alex Wilhelm: I mean, because the Brex signs, sorry, not the Brex signs, because there’s also Brex signs.
Kate Clark: There are a lot of Brex signs.
Alex Wilhelm: Oh man, that’s bad. The Rippling signs that I was discussing are also out and around in Sonoma. Brex’s famously did that before. Rippling’s now also doing it.
Kate Clark: Yeah. I mean, I walked past Pinterest’s office every day on my walk home. It’s all just right here.
Alex Wilhelm: Well that’s like a block and a half from the office here.
Kate Clark: Well, no. That’s not done yet. They’re just building it, right?
Alex Wilhelm: I thought they were done.
Kate Clark: Oh, they are? I have no idea. Okay, they’re done. Our producer’s nodding. They’re done.
Alex Wilhelm: Yeah, because they opened the coffee shop in there.
Kate Clark: I thought they were building it. Okay.
Alex Wilhelm: If you walk by it everyday on your way home, how do you not know that it’s done?
Kate Clark: Am I thinking about Lyft building a new office? I think somebody else is also building a new office.
Alex Wilhelm: We’re going to keep … We’re going to keep. We’re not going to cut that. We’re going to keep that. If you can’t hear me now, we’ve been censored. Anyways, the important thing is that we need to pay more attention to the international markets, and not just our neck of the woods.
Kate Clark: I agree.
Alex Wilhelm: So what I wanted to do was, ask people to email us. I’m alex@crunchbase.com and you are?
Kate Clark: Kate.clark@techcrunch.com.
Alex Wilhelm: So if you are in I don’t know, Ireland, or if you’re in somewhere in Africa, or you’re somewhere in South East Asia, or wherever you are, if you’re in Russia. I don’t know. Send us an email if you think that your local market is popping, because we would love to learn more about the word. We do our best to read international news and look at international rounds, but we are based here, and that means we’re a little bit blind. So please let us know what’s up so we can make Equity bigger and better and bolder and badder over time. And that brings us to everyone’s favorite last topic of the day. Kate, can you tell me about the Midas list?
Kate Clark: That’s another thing that I always mispronounced, because I think I was saying Meedas? Okay, so Midas. All right. So yeah, I mean, along with this big story on Andreessen , Forbes came out with their annual Midas list where they rank the top 100 venture capitalists by predicting exits and … It’s ranked by how much money they’re bringing in, but they don’t actually know because, say you’re an investor in Uber, you don’t know exactly what it’s going to go public at, you don’t know exactly … Or, there are other examples. Like late change companies that’ll presumably IPO or be acquired, they sort of look at the valuation to maybe add a little more there, and that’s how they determine it but we’re just going to talk it for a second.
Kate Clark: A lot of people think it’s very stupid. A lot of people think it’s meaningless. Alex is raising his hand. But, as I was just telling Alex before we recorded, some people are quite devastated when they don’t make this list. I don’t feel bad for them, by any means, but it’s just saying it’s interesting, because I never paid attention to it before, and I frankly haven’t even read through it this year because it doesn’t matter to me. So some people take the Midas list very seriously and were very upset not to be on it. Others of course celebrated being on it. I think the general consensus is like VCs will say it doesn’t matter, but then it absolutely matters to them. What are your thoughts?
Alex Wilhelm: Well, it’s a bit like authors who claim to not read reviews. I don’t believe you. You do do this, but also, I think the easy, sarcastic way to approach this is, “Oh no, he rich people didn’t get as high on their list as they otherwise would have wanted to.” But at the same time, we are seeing a change in the venture capital landscape, and Erin Griffith wrote about this For the New York Times the other, I think last week in a post entitled, Hey Mom, Look at Me. I’m a VC. It was a discussion about how a lot of VCs are being a lot more PR conscious, and a lot more image-focused, because you can’t just have money and have that be unique enough to attract top-level dual flows. So to me, this is a probably more important list than it used to be, given the criticalness of profile, if you —
Kate Clark: Right. And you know, this isn’t the only list that ranks VCs. CB Insights also does one. So, has CrunchBase thought about doing that? Or do they?
Alex Wilhelm: I absolutely will never do that.
Kate Clark: Well, not Crunch Base News, but maybe Crunch Base.
Alex Wilhelm: Oh, I don’t know what they’re going to do, but Crunch Base News are not, because VCs are rich, and and don’t need to be fetted by me.
Kate Clark: Yeah, I would absolutely never do that, either.
Alex Wilhelm: Also, you have to talk to them all the time, and that would just be tedious.
Kate Clark: Yeah. I do feel bad for the people who have to actually put these lists together, because I can’t imagine it’s particularly rewarding.
Alex Wilhelm: It’s an enormous amount of work.
Kate Clark: Yeah, it is an enormous amount of work, and like more power to them for doing this.
Alex Wilhelm: Yes. It’s a good bit of journalism to do, and I think it is useful to the community, and I don’t want to make too much fun of it. But also, it is VCs, so a little bit of fun. Yeah. And that’s Equity for this week, everyone. Thank you for sticking around. Kate, great to be back in the studio. Good to see you.
Kate Clark: Thanks everyone. We’ll see you next week.