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. However, this system has its limitations. With so much influence concentrated in a small number of people, it can be difficult for institutional investors to navigate the shifting landscape.
Introducing Revere: A New Rating System for Venture Capital
Revere, a new startup built by former AngelList executive Eric Woo and family office operator Chris Shen, is playing on these characteristics. The company is launching a rating system for the venture capital industry, with the goal of creating a more standardized way to track information about emerging fund managers.
"We’re trying to create a more transparent and data-driven way to evaluate emerging fund managers," said Woo in an interview. "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."
How Revere Works
Revere uses 20 categories to verify, aggregate, and research into the quality of a firm across five areas: sourcing, team, value add, track record, and firm management. The company then creates a heat map using the same provided dataset that shows a firm’s strengths and weaknesses in these categories.
Research reports include everything from fund formation details to management structure, strategy, and service providers. Revere has written over 80 reports to date, with each one taking around two weeks to complete. The startup charges LPs on a per-rating basis or a monthly subscription fee for access to all reports.
A More Cost-Effective Solution
Revere’s strategy is reminiscent of what Cambridge Associates has been doing for years, but at a much lower cost. By using a standardized rating system, Revere aims to disrupt the industry through standardization instead of trying to get rid of investors’ need to pattern match and check specific boxes.
Raising Funds
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. The company also raised a $4.27 million round from Cherubic Ventures, Overlay Capital, Benhamou Global Ventures, Oyster Ventures, MDSV, and others.
The Need for Standardization
Venture capital will soon be brimming with ghosts – startups that have been overhyped or underperforming. With so much money pouring into the industry, it’s becoming increasingly difficult to separate the signal from the noise.
Revere wants to disrupt this industry through standardization. By providing a transparent and data-driven way to evaluate emerging fund managers, Revere hopes to create a more level playing field for investors.
Conclusion
The venture capital industry is in need of a standardized rating system. With so much influence concentrated in a small number of people, it can be difficult for institutional investors to navigate the shifting landscape.
Revere’s rating system aims to address this issue by providing a transparent and data-driven way to evaluate emerging fund managers. By using 20 categories to verify, aggregate, and research into the quality of a firm, Revere creates a heat map that shows a firm’s strengths and weaknesses in these categories.
The startup charges LPs on a per-rating basis or a monthly subscription fee for access to all reports. With over $5.62 million raised since launching, Revere is well-positioned to disrupt the industry through standardization.
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