How Tribe Capital selected and ranked Insider's 2022 Seed 100 and Seed 25 lists of the best seed VCs

• Tribe Capital spent three years creating a statistical model that finds the best seed investors.
• That model is the basis for Insider's Seed 100 and Seed 25 lists, which rank the best investors.

At Tribe Capital, data informs everything we do, such as which startups we invest in and which VCs we work with in our network. A few years ago, we asked ourselves a question: Who are the best seed VCs to partner with, based on data analysis?

To answer, we spent three years developing and tuning a statistical model that whittles down thousands of potential seed partners into a ranked list of the best-performing ones. This methodology became the basis for the Seed 100 and Seed 25 lists published by Insider.

We sought to find seed investors with a track record of investments that do the following:

• Performed well as indicated by initial public offerings or exits meaningfully above liquidation preference, meaning returns were achieved because the companies became more valuable, not because they raised a lot of money.
• Showed early signs of future success because their portfolios have cured well at the early stage, but have not yet exited.
• Tended to reach growth stage as indicated by Series B and follow-up rounds.
• Had well-rounded success, showing well across all attributes we measured even if they didn't have a single strength.

Our methodology begins by examining Crunchbase and PitchBook data to analyze each investor's performance in 25 areas. The model is designed to notice when an investor demonstrates extraordinary skill and shows a high likelihood of continuing to be outstanding.

Because our goal is to predict likely future success — rather than simply identify past accomplishments — we excluded from consideration any investor who was no longer active. We also needed a broad enough sample to draw conclusions, so we required investors to have five or more investments between 2008 and 2021. But the list does include solo venture capitalists and angel investors domiciled globally, measured by their investments in US companies.

It's worth noting that while we weight each criterion equally, the score our model produces moves a lot with exits — aka IPOs or acquisitions — so "exits" is the most influential category that differentiates investors from the rest of the pack.

Because it typically takes a few years to gauge the quality of seed investments — and the investor behind each one — we're reviewing an extended timeframe. On average, we've observed that it takes seven to 10 years from seed investment to exit.

To ensure year-over-year consistency for the second annual Insider Seed 100 and Seed 25 lists, we kept the same quantitative approach from last year's lists, but we updated them to cover investors' more recent performance.

Growth and movement in the list

In 2022, 37 new investors were added to the Seed 100 list. And 28 people moved upward — many of them by more than 20 spots — while 33 people moved downward, the vast majority by more than 10 spots.

When we looked at year-to-year movement among the top seed investors on these lists, we observed that while performance change was relevant (such as new exits), many of the overall rank changes were a byproduct of growth in the overall population of seed investors.

In other words, an investor who dropped in rank didn't necessarily become "worse." Instead, the field of competition became more intense. It's harder to stay in the top 100 as the total pool of seed investors grows.

In total, our eligible candidate pool grew about 15% since last year, to 1,400 people, excluding members of the Tribe Capital team.

Statistically speaking, the top 20 investors tended to have the tightest distributions of scores among the criteria we measured and enjoyed the highest level of confidence — movement among these top contenders was more notable than what happened lower down the list.

Women and diversity

Venture capital has historically been characterized and driven by "who you know" versus "what you know." That industry dynamic causes systemic issues, among both investors and founders. If women struggle to get an invitation to the club, it's unlikely they'll find many peers flourishing inside it.

This is changing. Today there are many excellent seed investors from various backgrounds who are making savvy bets on young startups. But because it can take up to 10 years for the results of those bets to be seen, there isn't a sufficient track record from enough deals with data that can be validated for many of these rising-star investors to be in contention for the broader Seed 100 list.

Nonetheless, we're seeing an encouraging emergence of female seed investors in the venture community, so we've created the Seed 25 list to highlight them. The 2022 Seed 25 list heavily weights toward historical data from 2008 to 2021.

Given the activity we see in the market today, we expect female representation to improve over time. In 2020, Women in Venture reported that about 5% of venture-capitalist partners were female. And our 2022 Seed 100 list highlighted 11 women, up from 7 in 2021.

In fact, the total pool of eligible female investors grew from 76 women in 2021 to 99 women in 2022, a 30% increase and double the growth rate of the general seed-investor population in scope. Our models further show that the likelihood of success for female investors looks similar to that of male investors; that is, female seed investors have the same probability of success as their male counterparts, so long as they get the opportunity to compete.

The same situation is taking place with diverse investors. Many of our team members at Tribe come from diverse backgrounds, and we recognize the inherent challenges of thriving in a system that wasn't built by, or for, people like ourselves. Systematic bias is one of the problems that Tribe Capital's quantitative approach is designed to tackle and address. And we believe that broader representation in the industry, and therefore among the Seed 100, will improve over time. (Read: How Tribe Capital's Arjun Sethi uses data, not feelings, to choose the startups his fund backs.)

Jake Ellowitz is a partner at Tribe Capital and the data scientist who pioneered Tribe's mathematical models for the startup and venture-capital industries.