As journalists, we’re constantly second-guessing investments made by VCs. With that in mind, the writers and editors of Venture Capital Journal decided to find out if we’re are really as smart as we think are, or are as dumb as rocks when it comes to picking good deals.
The result is the VCJ 20, which lists the 20 most promising startups that received seed or Series A financing in 2009.
The goal of this project was to create a list of truly promising companies, no matter who founded them or who their backers were. VCJ focused on five factors when rating each company: potential market size, quality of the team, technology edge, business model, and exit potential.
I’m proud to announce that the company at the top of VCJ’s list is Cloudera, which offers consulting services and is building tools around Hadoop software and is backed by Accel Partners and Greylock Partners.
Cloudera scored a total of 24 out of 25 potential points because it rated highly in all five areas we focused on: It is targeting a multibillion market—tracking and analyzing the mountains of content and behavioral data constantly streaming out the Internet; its team is made up of tech stars from Facebook, Google and Yahoo and led by a successful repeat entrepreneur; it has hired the creator of Hadoop as its chief architect to develop tools based on the open-source software; it already has revenue from a consulting business and plans to make big bucks by selling easy-to-use Hadoop tools; and it has very strong exit potential—either a big IPO down the road or a lucrative sale to any one of a number of giant companies, including Oracle.
The four other startups that rounded out the top five of the VCJ 20 are:
- Pixazza Inc., which has developed an e-commerce platform based around photos. It has raised $5.75 million from August Capital, CMEA Ventures, Foundation Capital and Google.
- On-Q-ity Inc., which is developing diagnostic tools for the treatment of cancer patients at various stages of the treatment cycle. It has raised $26 million from Atlas Venture, Bessemer Venture Partners, Mohr Davidow Ventures, Northgate Capital Group and Physic Ventures.
- Organic Motion Inc., which makes computer vision and marker-less motion capture systems. It has raised $8.3 million from the Foundry Group.
- General Fusion Inc., which is attempting to create a fusion-powered electrical generator. It has raised $22 million from Braemar Energy Ventures, Chrysalix Energy, Entrepreneurs Fund Management, GrowthWorks Capital and Sustainable Development Technology Canada.