Midas List Europe recognizes investors who have earned the best returns—that is, their companies have gone public, had an M&A transaction or raised rounds of financing at an increased valuation. A data-driven list, it is produced from a combination of public data sources and the submissions of hundreds of investment deals across dozens of firms each year.
With the publication of the sixth Midas List Europe, we’re taking the opportunity to pull back the curtain and look at what it takes to make the List.
Working to assist Forbes as its data partner in creating the List is TrueBridge Capital, which has lent its industry knowledge to the process since its debut in 2017. Together, Forbes and TrueBridge have tweaked the Midas model to improve accuracy each year. The Midas team spends months compiling and analyzing the data to create as complete a picture as possible of investors in the region and their portfolios.
To qualify, investors are ranked by their portfolio companies that have gone public or been acquired for at least $100 million over the last five years, or that are private and valued at $200 million or more, also over the last five years. This lookback period of five years helps quantify the success of a VC by rewarding recent bets. For example, Spotify has been a major driver of determining the top European investors over the past five years—but in 2023, that investment will no longer be eligible for consideration, allowing opportunities for new entrants. Accordingly, investors must make continuous successful bets to maintain their standing on the list, a reflection of investing skills over a long period of time.
In addition, VCs must invest on behalf of third-party limited partners—investors backing companies from personal balance sheets or for a single corporation don’t qualify as they often have different objectives driving their investment strategy. Investing partners also must be located in Europe, Africa or the Middle East.
The methodology has remained the same since the first Midas List Europe six years ago. TrueBridge receives confidential submissions from venture firms across the region. This data submission includes information such as when a firm first invested in a company, whether they’ve held a board seat, and to what degree the investment has been realized. While submissions are being accepted, the analysis team at TrueBridge scours publicly available data on M&As, public offerings and fast-growing companies with write-ups in valuation. We also consider industry information and data from historical lists, combining everything into a comprehensive set of data points for the Midas model.
Exit calculations and the latest private company valuations result in an individual score for each portfolio company. Each VC who invested in the company gets a score for that bet based on several variables. Investing in a company’s first round gets full credit with later rounds being discounted. Multiples and ownership are factored in. The size of an investor’s total investment, board participation and whether the company is located in Europe, the Middle East or Africa are included. This process is repeated for all companies attributed to each investor—which amounts to a total deal score. We apply more math regarding the total number of qualifying deals attributed to each VC, resulting in a basic score for each partner.
The number of firms submitting for the List has increased each year since it was introduced, resulting in thousands of data points for analysis. The number of deals has gone up, too. In fact, the average number of qualifying deals per partner (again, defined as $100 million exited or $200 million private) has more than doubled in recent years. This year, the top 25 VCs had an average of 12, with our top investor, Danny Rimer, coming in with a remarkable 27 qualifying deals. As markets have grown and valuations ballooned over the past few years, and as the venture industry in the region has expanded more generally, gaining a spot on the list has gotten more difficult.
We believe using quantitative factors that have been verified across several data sets results in the Midas List Europe being among the most data-driven ranking of its kind. Venture capital has a significant impact on global innovation, but often feels like a black box to those outside of the industry (and some within, including many first-time founders). We hope that the list not only spotlights those investors who are backing the household names of tomorrow, but also provides some insight into the venture process overall.
We also hope that the list highlights the changing nature of the venture industry. The number of submissions from women, people of color and investors from newly emerging tech geographies has increased over the years, while also serving as a reminder of how much improvement is still needed across the industry.
As Europe continues to grow its startup ecosystem and overall tech prominence, we look forward each year to recognizing the partners who are not only funding innovative founders, but often rolling up their sleeves beside them.
Additional details on the Midas model and which quantitative factors influence the list are at the Midas List Europe submission site. You can sign up to be notified when submissions open each year by emailing firstname.lastname@example.org.