How the Conduct Index is built.
A transparent, independently reproducible rating system for seed and early-stage investors. Six public data sources. Five weighted subscores. Quarterly refresh. Investors cannot pay to improve their grade — methodology and source data are published in full.
Guiding Principles.
The Capital Conduct Index exists to answer a single question: will accepting this investor's term sheet compound the founder's outcome — or compromise it?
- Public records only. Every input sourced from PitchBook outcomes data, SEC Form D filings, PACER federal court filings, FTC consumer complaints, public founder testimonials, or PANDA's proprietary cohort survey.
- Investors cannot pay. No rated investor has paid, can pay, or has been offered the opportunity to pay for inclusion, exclusion, or modification of their grade.
- Quarterly refresh. Grades update every 90 days; material changes timestamped.
- Subscore transparency. Every grade decomposes into five public subscores.
- Right of correction. Investors may submit documented corrections via published Appeals process.
The Six Data Sources.
The Index is constructed from six independent public-record sources. No single source can move a grade by more than 35%.
PitchBook / Crunchbase Outcomes
Portfolio outcomes data — follow-on funding rounds, exits, valuations, and survival rates indexed by lead investor.
SEC Form D Filings
SEC private-offering filings indexed by lead investor. Used to verify round timing, size, and investor concentration patterns.
PACER Federal Court Filings
Founder-vs-investor disputes, governance lawsuits, term-sheet enforcement cases, and board-behavior litigation filed against rated investors.
FTC Consumer Complaints
FTC and SEC complaints filed by founders against investors. Critical for identifying patterns of fraudulent or coercive investor behavior.
Public Founder Testimonials
Founder Twitter, blog posts, podcast interviews, and other public statements about investor behavior. Cross-validated against outcomes data.
PANDA Cohort Survey
Anonymized opt-in survey of PANDA-affiliated founders who have raised capital from rated investors. Methodology and response rates published in Annual Report.
The Five Subscores.
Term Sheet Honesty
Clarity, fairness, and absence of surprises in term-sheet terms. Includes liquidation preferences, anti-dilution provisions, voting rights, founder vesting acceleration, and side-letter behavior. Investors who consistently use standardized founder-friendly terms (post-money SAFE, YC-style standard agreements) receive higher scores.
Founder-Friendliness
Board behavior post-investment. Includes governance posture, willingness to support founder-CEO continuity, treatment in down-rounds, and disposition during difficult portfolio-company decisions. Cross-validated against founder testimonials.
Follow-On Discipline
Consistency of follow-on capital provision through Series A/B. Includes pro-rata participation, bridge-round support, and willingness to lead follow-on rounds when appropriate. Investors with documented patterns of abandoning portfolio companies receive penalty.
Exit Support
Investor behavior during portfolio-company exits, wind-downs, and acquisitions. Includes alignment with founder interests during sale processes, treatment of common equity holders, and post-exit founder relationships.
Network Quality
Substantive value-add of the investor's network beyond capital. Includes customer introductions, executive hires, follow-on investor introductions, and post-investment operating support. Distinguished from marketing claims by founder-survey validation.
Weighting & Scoring.
Why these weights? Founder-Friendliness is heaviest because board behavior over five years determines whether the founder retains control or loses it. Term Sheet Honesty and Follow-On Discipline tie for second because they directly determine the founder's net economic position. Exit Support and Network Quality complete the composite.