If the limited partner community gave each venture capitalist a report card for 2001, my guess is there wouldn’t be too many A’s flying around. The year past will likely be the worst ever for fund performance, and a tough economy mixed with a difficult exit market made success highly elusive. Sure, some VCs fared better than others, but the industry’s overall position was one of weakness, not strength.
So when we started planning this month’s issue-the first of its kind for VCJ-one of the challenges was finding a way to carefully and credibly highlight a select group of VCs against the backdrop of the industry’s lowest point in recent memory. Unlike previous years, when these types of selections seemed to be based on who did the most IPOs, or who banked the most returns, or who had the biggest fund, those metrics weren’t as relevant in 2001. Thus, rather than pick the few VCs who were lucky enough to do profitable exits in 2001, for example, we opted to look forward and focus on influential VCs who, in our estimation, will be worth watching in 2002.
To be sure, the term influential can be defined numerous ways. Some would argue money equals influence, while others would say experience-especially at a time when the 28-year-old brainchild CEO has lost its luster-should be heavily weighted. Indeed, we looked at both of those factors, as well as board seats, sector expertise, personal connections and a host of other characteristics. We also required that each candidate had to be verified as influential by a third party (translation: confirmation from best friends and colleagues didn’t cut it).
You’ll notice that we didn’t put a limit on how many VCs could come from a single firm (two of the select group are from one firm), nor did we choose one VC per important sector (two are linked to nanotech). We also didn’t put any requirements on capital under management, although having plenty of dry powder to spare clearly helped some of the people on this list.
Another point that needs to be made: This issue seeks to identify influential VCs, not influential firms. Thus, the readers should not infer that the omission of a VC from firms like New Enterprise Associates or Warburg Pincus, for example-two of the biggest investors in this business-means we think those firms aren’t influential. Moreover, there was no intention on our parts to include or exclude any particular firm.
But that doesn’t mean we were casual about our selections. Our reporters and editors spent countless hours of research for this issue and had plenty of heated discussions about the merits of each candidate before the final group was chosen in mid-December. The end result was a list of selections that is thoughtful, well researched and, at least in some cases, not what you might have expected. We hope you’ll enjoy reading each of our 10 profiles, which are listed in alphabetical order.