TechCrunch has an article today about InvestorRank, a PageRank-like method of picking the most important VC firms. Instead of ROI or other factors that can change, it rates the firms by their links with other top VC firms.
OK, kinda like PageRank, but not quite. The "links" are based on how many other firms each one co-invests with. That really means that it's just a listing of which firms are the best-connected -- which isn't a bad measure of importance.
But it doesn't mean that the VCs are good at spotting hot new companies, just that they're able to piggyback on good deals their friends come up with. And firms like Kleiner, which tend to get any deal they want because they're so famous, get the great deals because everyone pitches to them, not because of any particular insight.
It's interesting to recall, for example, that Jeff Bezos initially had trouble getting Kleiner to return his phone calls when he set out to get VC money. But he was persistent and tapped all his connections to get John Doerr's attention. Of course, Bezos then played hardball and kept telling Kleiner that he had other offers so that he could get a good deal.
Still, it's worth pitching to one of the well-connected VC firms, because they can bring in other top firms, so the list seems useful.
One other thing to note, however, is that the InvestorRank system was devised by Chris Farmer at General Catalyst Partners, which comes up unusually high on the list: number 6, ahead of NEA and Kleiner.
I'd like to also point out that the best book authors are clearly those who receive the highest ratings from Publishers Weekly. That puts me ahead of Ken Auletta in the "Books about Google" category.
Now I just have to figure out how to translate that into Auletta-type sales.
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