Move Over Unicorns, Here Are the Winners We Should Most Celebrate in U.S. Venture for 2017
In 2016, we published a blog post, Unicorns are Overrated. Triple Crowns are Better, arguing that unicorns are overrated because some investments into unicorns don’t deliver winning returns, and some of the best venture investments were not unicorns. We proposed a better definition of winner that we dubbed a “Triple Crown” and suggested that the industry should celebrate these.
Correlation Ventures has among the most complete database of U.S. venture financings and outcomes in the industry and scoured it to identify the potential Triple Crown Winners for U.S. venture-funded companies exiting in 2017.
So who were the true winners — the Triple Crown financings — for U.S. venture in 2017?
To check out the details on each of these Triple Crowns, including the founders and CEOs, which VCs invested, and who was on the Board, keep scrolling to the table below.
A Triple Crown is a financing that meets each of the following three conditions:
1. at least $1M invested by VCs
2. realized a 10X+ multiple, and
3. realized a 100%+IRR.
The above financings are the ones for which we’ve received permission and which appear to meet each of the three above conditions. We are committed to keeping any information in our database confidential unless we receive permission and confirmation of the facts from at least one of the key players involved. For IPOs, for simplicity, we use the stock price six months after the IPO or 3/31/18, whichever is earlier, regardless of when each VC actually sold their stock.
We found some facts about these seven Triple Crowns interesting:
· Only four were in unicorns (i.e., in companies with exit values of $1B or more), and many unicorns that exited in 2017 had no financings on this list
· All were in venture centers: three in San Francisco, and two each in New York and Los Angeles
· They were evenly spread between Seed, Series A, and Series B
· All were in tech or consumer, none in life sciences (note: there have been life science Triple Crowns in prior years)
The three Triple Crown hurdles are by nature arbitrary (as is the $1B unicorn hurdle) and there were, of course, many fantastic outcomes that didn’t quite meet one or more criteria. For example, Baseline led the seed round for Stitch Fix which easily met the multiple and IRR hurdles, but the raise was just under $1M. Similarly, Mayfield led the Moat Series B which met the raised and multiple hurdles but not quite the third hurdle.
The Triple Crown is designed to highlight venture investments that generated the highest absolute returns. It does not factor in risk.
It will therefore tend to favor earlier stage investments, which carry greater risk but have higher expected returns when compared with later stage investments. On a risk-adjusted basis, it is possible, if not likely, that more later stage investments would have been identified as winners.
Of course, please let us know if there are any edits to the above information, or if there are any financings we missed in companies exiting last year that you believe met each of the three Triple Crown criteria. We will update this blog post with any corrections.
Congratulations to the entrepreneurs, VCs, and independent directors who were responsible for such fantastic 2017 exits!
If you are entrepreneur raising or working with a team that is closing a round, we would value any introductions where we might be helpful as a co-investor. By the way, we add value, but don’t take board seats.
Correlation Ventures is the predictive analytics pioneer in the venture capital industry and the industry’s leading co-investor. With more than $360 million under management, we’re one of the most active U.S. venture investors, investing in about two to three new investments a month. Over the last five years, we’ve invested in over 185 companies. Selected portfolio companies include: AlienVault, Bluevine Capital, Casper, Optimizely, Personal Capital, Sun Basket, Galera, Synthorx, and Upstart. Correlation offers a dramatically better option for lead investors, syndicates, and companies seeking additional venture capital to fill out a round. We offer the most rapid, convenient, and reliable source of co‐investment capital in the industry; for example, committing to make investment decisions within two weeks or less. Correlation is backed by leading institutional investors.
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