Over the last 18 months, this is one of the questions I keep hearing. “Who are the best marketplace investors?” I have been trying to answer for the previous three years. Various conversations both on and off the record – tells me that many are trying to get a clearer answer. Investment in anything – business, team, or even yourself is not easy, and the potential for it to go wrong is a reality.

Investors from all across the globe are different

Historical data only tells the story of the successes. Investors, in most cases, don’t talk about failure on their websites and only list exits and do not mention what failed. 

I want to make a few points clear:

• Being in the right place at the right time is not a skill but somewhat lucky. Masa Son of Softbank has no thesis and believes he can find the next Alibaba. I look at Naspers’s track record and dependence on Tencent as a reminder that success is hard.
• Your thesis is essential, but the way investors engage with startups is the real signal. I have sat in conversations and heard stories that, if the public would remove the prestige of various well-known investors. (I won’t share names here, but the point is that past success is in the past. Experience is only helpful if you share and engage with your investment.
• Amazon has made investment in e-commerce or consumer commerce businesses hard. I hear many seed investors say that they are only investing due to fear of losing out. If founders were aware of the dumb money that is available, it would shake them and how they interact with firms. 
• The right investors are always looking for what is next and use common sense. They are aware of the economic climate, only invest in companies with traction amidst a re-ordering.
• Private companies have been over-valued in private markets, and reality hits when they IPO. I continue to think that direct listing is a solution for some companies, but going public has a time frame. 
• Hedge funds are the right signals for what is going on in the world. I have five funds I spend hours looking into as they have returned capital to LPs better than most. These companies, in general, are not in public discussions and do not want press coverage. They invest in data and data scientists and use a variety of sources to underwrite success. In saying that, in most cases, failures are not mentioned.

Experience is the differentiator

Investors either have a track record, or they don’t. That does not mean that a new investor at a top-tier investor has no credibility. Contrary, look at what they did before writing checks and who long they spent there. 

Investors who were operators is an advantage. Do they have domain experience from select board seats? Do they empower their team? I have written about commerce DNA for entrepreneurs and have a very similar thesis on VC’s. Not all e-commerce investors are going to generate 10x returns, and not all are going to find the next big thing. You will read about deal-flow. The question is, can they build relationships?

The best marketplace investors (in no particular order):

• Accel
• Balderton Capital
• Benchmark
• Bessemer Ventures
• Greylock
• GGV Capital
• Index Ventures 
• Jackson Square Ventures
• Union Square Ventures
• Version One 

NFX Guild gets an honorable mention as they contribute to the ecosystem via education. The lack of exit data makes them unsuitable for my list. 

When these firms invest in marketplace startups, it’s a signal that they see the right information. 

Why is ABCDEF not on this list of ten?

Over the last 18 months, I have seen investors make repeat mistakes and make decisions that made my head spin. Creating lists, PR, and noise around their investments comes with being an investor. Does any of that lead to real insight and conclusions? I sometimes feel that some investors are tone-deaf and not learning from the past.

I know I am going to get a lot of flack for this, but the world has changed. Silicon Valley is no longer the center of the universe as entrepreneurs are going home. The argument around current macro and political climates are valid; entrepreneurs no longer need to be in California to access top-tier investors. I look at Jumia in Africa and see what Rocket Internet has left, and it has reaffirmed my belief that experienced entrepreneurs solve local problems. 

The future

Readers, I doubt you understand the mammoth task I do to create the newsletter. It’s 20 to 25 hours of reading, aggregating content via a custom solution. I am then picking the 20-30 articles that are of importance. I rank the items based on the significance of the topic and use the click data from readers as validation, whether that is the case. (In some weeks I laugh at the wisdom of the crowd and how wrong I got it.)

In 2019 I had a dream to monetize my newsletter and put it behind a paywall. The struggle and costs of registering a US entity for a non-US citizen amid the current political climate, I am moving away from that idea. I always want to help, be helpful, and to put my content behind a paywall makes little sense. 

I am starting a podcast called “around the world in commerce” and am currently recording relevant content. I have had so many requests from readers about it; it took COVID-19 to move forward with the idea.

What I need

Having done my newsletter for more than five years, I need more readers and am also looking for sponsors for my podcast. 

It boils down to the following: my medical costs are $100k per year (thank you medical insurance for covering a large part of it). I hit the point early in June that I now need to pay out of pocket until a number before the pay everything again (with strings attached). When people meet me, it is impossible to know that I visit a hospital every eight weeks for treatment, and that is the way I manage this, out of sight. 

So I need more feedback on the newsletter, my writing, and the podcast when it arrives. What more do you want? How can I be more helpful? Or how we can partner for you to leverage my insights and global network to drive revenue.