Featured Article

Revere is creating a ratings system for the venture capital industry

The startup has raised over $5 million for its data-driven vision

Comment

Image of five dice against a red background
Image Credits: Paul Taylor (opens in a new window) / Getty Images

The venture capital industry is built on signals. Lead investors help close rounds, pro rata rights show promise of a company, and the partner title gives validity to folks within firms looking to close deals.

Revere, a new bet being built by former AngelList executive Eric Woo and family office operator Chris Shen, is playing upon these characteristics. The startup, launching publicly today, is building a rating system for the venture capital industry. The goal is to create a more standardized way to track information about emerging fund managers so that institutional investors know how to navigate the shifting landscape.

“There’s just too much influence in a small number of people, where if Keith Rabois or Elon Musk just tweet something, everyone just jumps on the bandwagon,” Woo said. “In the space of emerging managers, typically that signal comes from big anchor LPs.”

How it works

Revere’s pitch is that a wider audience wants to participate in backing venture capitalists; they just need the signal on where to go and how to gauge (since proof of consistent returns isn’t necessarily a reality thanks to the whole 10-year horizon thing).

Using data provided by an emerging venture firm, Revere uses 20 categories to verify, aggregate and research into the quality of the firm across 5 areas: sourcing, team, value add, track record and firm management. It then creates a heat map, using the same provided dataset, that shows, at a quick glance, a firm’s strengths and weaknesses in said categories. Research reports include everything from fund formation details, management structure, strategy and service providers, when evaluating the firm. It’s doing due diligence, and to date, Revere has written over 80 reports.

The strategy is reminiscent of what Cambridge Associates has been doing for years, but the startup claims to do it cheaper, faster and with emerging fund managers as a key focus. For example, Revere doesn’t charge fund managers for reports; instead it charges LPs on a per-rating basis, or a monthly subscription fee for access to all reports. The 11-person startup currently takes around two weeks to whip up a report. Over time, if demand increases, it will get harder to turn around reports in that same timeframe.

As Revere gathers more data, it sees an opportunity to create more performance benchmarks for the asset class, something that PitchBook and Cambridge Associates hasn’t done well, per Woo. “The moment we’re able to stand up and say here are the benchmarks, and we’re showing you why funds that are smaller, at an earlier stage are outperforming, then we think that’s going to be literally a sea change in terms of perception of risk,” from the LP side.

The startup currently has over 100 funds on its platform. Revere declined to share any customer names but said that one of its first customers was a sizable investment consultant. The company doesn’t see itself becoming a marketplace that helps conduct transactions between verified firms and interested LPs; however, it did confirm that millions have been invested in funds as a result of its reports.

While Revere is not able to widely disseminate a report with actual fund manager data, the format, tone, and structure of the sample data in the template report below gives a good sense of what subscribers see.

REVERE Ratings – Lantern Ve… by TechCrunch

But who rates the ratings?

Ratings is a sensitive topic in venture, only reinforced by some of the reactions I got by investors when telling them about this ratings platform. VC ratings sites have popped up in the past, largely led by and for founders, but have always struggled with negative bias selection and the difficulty of verifying individual accounts. Backchannel, currently accepting beta users on its Testflight, wants to be a private subreddit for founders and LPs. Revere will need to convince investors that this isn’t a ranking of who’s hot and who’s not, but instead research-based recommendations meant for LPs (not tech twitter).

Still, Revere could find itself falling into the same trap that others have. Subjectivity in some of the qualitative reporting of new venture firms could raise questions. The company doesn’t use hard science or artificial intelligence to make conclusions about a firm, meaning that bias could easily sneak in. Would Woo feel stronger about a former AngelList exec raising a new fund, or would Shen look especially for people who understand the depths of the family office world? The difficulty is getting people to lean on data, instead of brands, when it comes to backing new ventures.

Woo and Shen believe that Revere’s job isn’t necessarily to give a thumbs-up or thumbs-down on whether a certain venture fund or person is a good idea, but instead offer a whole picture on what one entity is offering in a current moment in time. That said, in a mock-up of a report, Revere showed that it rates firms using categories like “excellent” and “best in class,” a nomenclature reserved for “all-around performers who rate well across multiple categories.” Every year, the company ranks a few firms as either best in class, rising stars, or verified.

“Part of the reason people love investing in venture capital is for the intangibles, right? If they just purely wanted returns, and sort of good risk-adjusted returns, there’s other asset classes,” Woo said.

3 views: How due diligence will change in 2022

So far, Revere has raised $5.62 million since launching, including a May 2021 pre-seed round of $1.35 million from investors such as AngelList, Twitch co-founder Kevin Lin and Blue Future Partners. It also raised a $4.27 million round from Cherubic Ventures, Overlay Capital, Benhamou Global Ventures, Oyster Ventures, MDSV, and others.

Instead of trying to get rid of investors’ need to pattern match and check specific boxes, Revere wants to disrupt the industry through standardization. Let’s see if the market is ready to ask for help and if the standard is tired enough to be disrupted, PDF style.

Venture capital will soon be brimming with ghosts

More TechCrunch

Jasper Health, a cancer care platform startup, laid off a substantial part of its workforce, TechCrunch has learned.

General Catalyst-backed Jasper Health lays off staff

Live Nation says its Ticketmaster subsidiary was hacked. A hacker claims to be selling 560 million customer records.

Live Nation confirms Ticketmaster was hacked, says personal information stolen in data breach

Featured Article

Inside EV startup Fisker’s collapse: how the company crumbled under its founders’ whims

An autonomous pod. A solid-state battery-powered sports car. An electric pickup truck. A convertible grand tourer EV with up to 600 miles of range. A “fully connected mobility device” for young urban innovators to be built by Foxconn and priced under $30,000. The next Popemobile. Over the past eight years, famed vehicle designer Henrik Fisker…

2 hours ago
Inside EV startup Fisker’s collapse: how the company crumbled under its founders’ whims

Late Friday afternoon, a time window companies usually reserve for unflattering disclosures, AI startup Hugging Face said that its security team earlier this week detected “unauthorized access” to Spaces, Hugging…

Hugging Face says it detected ‘unauthorized access’ to its AI model hosting platform

Featured Article

Hacked, leaked, exposed: Why you should never use stalkerware apps

Using stalkerware is creepy, unethical, potentially illegal, and puts your data and that of your loved ones in danger.

3 hours ago
Hacked, leaked, exposed: Why you should never use stalkerware apps

The design brief was simple: each grind and dry cycle had to be completed before breakfast. Here’s how Mill made it happen.

Mill’s redesigned food waste bin really is faster and quieter than before

Google is embarrassed about its AI Overviews, too. After a deluge of dunks and memes over the past week, which cracked on the poor quality and outright misinformation that arose…

Google admits its AI Overviews need work, but we’re all helping it beta test

Welcome to Startups Weekly — Haje‘s weekly recap of everything you can’t miss from the world of startups. Sign up here to get it in your inbox every Friday. In…

Startups Weekly: Musk raises $6B for AI and the fintech dominoes are falling

The product, which ZeroMark calls a “fire control system,” has two components: a small computer that has sensors, like lidar and electro-optical, and a motorized buttstock.

a16z-backed ZeroMark wants to give soldiers guns that don’t miss against drones

The RAW Dating App aims to shake up the dating scheme by shedding the fake, TikTok-ified, heavily filtered photos and replacing them with a more genuine, unvarnished experience. The app…

Pitch Deck Teardown: RAW Dating App’s $3M angel deck

Yes, we’re calling it “ThreadsDeck” now. At least that’s the tag many are using to describe the new user interface for Instagram’s X competitor, Threads, which resembles the column-based format…

‘ThreadsDeck’ arrived just in time for the Trump verdict

Japanese crypto exchange DMM Bitcoin confirmed on Friday that it had been the victim of a hack resulting in the theft of 4,502.9 bitcoin, or about $305 million.  According to…

Hackers steal $305M from DMM Bitcoin crypto exchange

This is not a drill! Today marks the final day to secure your early-bird tickets for TechCrunch Disrupt 2024 at a significantly reduced rate. At midnight tonight, May 31, ticket…

Disrupt 2024 early-bird prices end at midnight

Instagram is testing a way for creators to experiment with reels without committing to having them displayed on their profiles, giving the social network a possible edge over TikTok and…

Instagram tests ‘trial reels’ that don’t display to a creator’s followers

U.S. federal regulators have requested more information from Zoox, Amazon’s self-driving unit, as part of an investigation into rear-end crash risks posed by unexpected braking. The National Highway Traffic Safety…

Feds tell Zoox to send more info about autonomous vehicles suddenly braking

You thought the hottest rap battle of the summer was between Kendrick Lamar and Drake. You were wrong. It’s between Canva and an enterprise CIO. At its Canva Create event…

Canva’s rap battle is part of a long legacy of Silicon Valley cringe

Voice cloning startup ElevenLabs introduced a new tool for users to generate sound effects through prompts today after announcing the project back in February.

ElevenLabs debuts AI-powered tool to generate sound effects

We caught up with Antler founder and CEO Magnus Grimeland about the startup scene in Asia, the current tech startup trends in the region and investment approaches during the rise…

VC firm Antler’s CEO says Asia presents ‘biggest opportunity’ in the world for growth

Temu is to face Europe’s strictest rules after being designated as a “very large online platform” under the Digital Services Act (DSA).

Chinese e-commerce marketplace Temu faces stricter EU rules as a ‘very large online platform’

Meta has been banned from launching features on Facebook and Instagram that would have collected data on voters in Spain using the social networks ahead of next month’s European Elections.…

Spain bans Meta from launching election features on Facebook, Instagram over privacy fears

Stripe, the world’s most valuable fintech startup, said on Friday that it will temporarily move to an invite-only model for new account sign-ups in India, calling the move “a tough…

Stripe curbs its India ambitions over regulatory situation

The 2024 election is likely to be the first in which faked audio and video of candidates is a serious factor. As campaigns warm up, voters should be aware: voice…

Voice cloning of political figures is still easy as pie

When Alex Ewing was a kid growing up in Purcell, Oklahoma, he knew how close he was to home based on which billboards he could see out the car window.…

OneScreen.ai brings startup ads to billboards and NYC’s subway

SpaceX’s massive Starship rocket could take to the skies for the fourth time on June 5, with the primary objective of evaluating the second stage’s reusable heat shield as the…

SpaceX sent Starship to orbit — the next launch will try to bring it back

Eric Lefkofsky knows the public listing rodeo well and is about to enter it for a fourth time. The serial entrepreneur, whose net worth is estimated at nearly $4 billion,…

Billionaire Groupon founder Eric Lefkofsky is back with another IPO: AI health tech Tempus

TechCrunch Disrupt showcases cutting-edge technology and innovation, and this year’s edition will not disappoint. Among thousands of insightful breakout session submissions for this year’s Audience Choice program, five breakout sessions…

You’ve spoken! Meet the Disrupt 2024 breakout session audience choice winners

Check Point is the latest security vendor to fix a vulnerability in its technology, which it sells to companies to protect their networks.

Zero-day flaw in Check Point VPNs is ‘extremely easy’ to exploit

Though Spotify never shared official numbers, it’s likely that Car Thing underperformed or was just not worth continued investment in today’s tighter economic market.

Spotify offers Car Thing refunds as it faces lawsuit over bricking the streaming device

The studies, by researchers at MIT, Ben-Gurion University, Cambridge and Northeastern, were independently conducted but complement each other well.

Misinformation works, and a handful of social ‘supersharers’ sent 80% of it in 2020

Welcome back to TechCrunch Mobility — your central hub for news and insights on the future of transportation. Sign up here for free — just click TechCrunch Mobility! Okay, okay…

Tesla shareholder sweepstakes and EV layoffs hit Lucid and Fisker