Top VCs?
Red Herring recently published their list of Top 100 Global Venture Capitalists ostensibly to help people identify the most successful VCs. The handful of Southern California firms to get into the list were GRP Partners (#23), Redpoint Ventures (#39), and Zone Ventures (#100).
Leaving argument about how these lists typically are constructed (who knows who, brand awareness, etc. tends to weigh pretty heavily in most of these “top 100″ lists, as opposed to any numeric weighting of ROI, etc.), the list is illuminating because, as a broad measure, it does show the difficulty of actually identifying who are the right investors to talk to in a market. I’m often asked–by experienced, second-time-around entrepreneurs–who the “tier one” venture funds are, here and elsewhere. By what measure? By return on investment? By entrepreneur-friendliness? On likelihood of investing in a venture? By connections to industry? On name brand prior successes? And should a venture fund even be ranked if they no longer are investing or are in the midst of fundraising with no capital available until they do?
In some cases, the firms with the best track record, financially, might be the least likely funding source for an entrepreneur; they might be too busy, have too many opportunities, or be too picky on their opportunities to mesh with an entrepreneur. On the other hand, a firm most likely to fund a startup might have no exit record, and not show up on a list anywhere.
In my mind, there should actually be two lists: the top VCs from a limited partner’s point of view (picked purely as you might pick any financial opportunity, by prior success, the management, etc.); and the top VCs from an entrepreneur’s view (by domain knowledge, likelihood of funding your deal, by industry contacts). The two may or may not intersect.
