The Destiny Tech 100
Destiny Tech 100 is designed to be an exchange-listed portfolio of the Top 100 High-Growth Tech Companies 🦄✨
The Destiny Tech100 will be a portfolio of the top 100 venture-backed private technology companies — providing everyday investors access to these private market leaders for the first time.
To be eligible for inclusion in the Destiny Tech100, companies must have been vetted by top US institutional investors and meet key health metrics. Further, the companies in the portfolio will generally have reached a level of maturity and stability expected of a late stage venture-backed company.
For more details please review our 2023 Semi-Annual Report
To be eligible for inclusion in the Destiny Tech100, companies must generally meet the following key health metrics:
Vetted by U.S. Institutional Investors
The company must have recently raised over $50M from reputable U.S. institutional investors.
Healthy Liquidation Preference Ratio
Company’s outstanding preferred stock liquidation preference must be healthy relative to current market capitalization.
No burdensome financial structures or heavy debt
Company’s financial structure must not be burdensome (e.g. ratchets with significant penalties, heavy debt loads) in such a way that it would create undue risk of impending financial distress.
No opaque foreign legal structures
Company’s corporate structure and governance must be transparent and within the range of standard corporate structures.
No usually high turnover, or cultural health red flags
Company’s executive team must not have had unusually high turnover over the past 18 months, or have internal cultural issues that concern us.
The Destiny Tech100 will simultaneously weight heavily into two categories of companies
These companies, valued at $10B+, provide stability to the portfolio while still sitting in the high growth tech category.
As newer members of the unicorn ranks, valued between $750M - $10B, these companies have the potential to yield a 10-50x return.
The Destiny Tech100 board will make the final determination on the inclusion, pricing, and weighting of companies in the Destiny Tech100, based upon recommendations by its investment oversight subcommittee.
If a company does not meet the inclusion criteria , it will be excluded from the portfolio by default, and can only be included by an affirmative decision of the board.
Upside Opportunity Metrics
For many companies at this stage, there is a real opportunity to achieve a 10-50x return.
Total Addressable Market Size
A large underserved market is a great place to be as a high-growth tech company. Larger markets create opportunities for larger outcomes.
Market Growth Rate
The size of the market is important, but often even more important is the rate at which the size of the market is growing.
Many of the iconic companies of the last generation achieved their success by dominating a smaller market and maintaining their advantaged position as the market expanded by orders of magnitude.
Company Growth Rate
It will come as no surprise to you that a company’s growth rate is highly correlated with investment performance. Beyond being a clear indication that a company has strong product-market fit and is executing well, growth rates are also highly correlated with future funding rounds, IPOs, and acquisitions.
Asset-Light, Software, and Platform based Business Models
We are big believers in the power of software to create revolutionary new ways of conducting commerce, running businesses, and communicating.
Destiny Tech100 will lean heavily into companies that are powered by software at their core. These kinds of companies tend to grow faster because of the low marginal cost of distribution, and tend to do so while delivering superior financial performance.
Network Effects Models, and Economies of Scale
What do Apple, Google, Microsoft, Facebook and Amazon all have in common? At their core, they all have the property that the larger they grow, the stronger their market position becomes.
These companies have enjoyed the benefit of their market position to grow to incredible sizes – to the point that today, all of them are subject to serious antitrust scrutiny.
While we are believers that competition is important for a functional and fair economy, there is no denying the fact that the best investments end up being ones that can benefit from these kinds of structural advantages.
Cultural Health Metrics
A company’s culture is a critical part of recruiting and retaining a top-tier team.
Health Diversity Metrics
We believe that talent is evenly distributed around the world across all races, genders, sexual orientations, and ages. Companies that best leverage the available talent pool tend to do better than those that do not.
Strong Cultural Health and Employee Reviews
We live in a world where employees have a voice and can share cultural issues on a wide rage of platforms. These reviews tend to be correlated with long-term success as they indicate that the company has been investing in creating a great culture.
Positive Environmental, Social & Corporate Governance (ESG) impact
Companies with an inspiring mission have an easier time recruiting the best talent. This creates a strong correlation between having a positive impact and long term financial performance.
Companies with a negative ESG impact also often have a harder time dealing with regulators, future funding rounds, IPOs, and acquisitions.
Companies that focus on creating a great culture tend to be long-term focused across the board.
Which aligns their goals with ours.
Financial & Pricing Considerations
We are disciplined in our investing, taking into account transaction structures and market pricing dynamics.
Structure of Transaction & Class of Stock
We take a structure-agnostic approach to investing, giving us the broadest availability of supply in prospective portfolio companies at attractive price. We analyze the structure of a given transaction and class of stock being purchased in the context of its price to evaluate its attractiveness.
Transparency of Financial Disclosures
We evaluate information on prospective companies from a broad range of sources, including directly from the company, secondary marketplaces, private company research firms, industry publications, and third-party commissioned analysis.
Recent & Historical Secondary Market Pricing
Data from secondary markets (Forge, EquityZen, CartaX, and others), independent broker-dealers, and investment banks can be incredibly valuable in determining approximations of market pricing.
This pricing may differ from the preferred stock price in recent financing rounds, and provides insight into what may be attractive or undesirable prices for a given transaction.