recently rated:

Rated by 41

2.5 2.6 2.6 2.8 2.4

2.6

General Catalyst

 

$$$$$ Cambridge, US East

top rated funds:

Rated by 13

3.0 3.8 3.5 3.2 3.4

3.4

Fidelity Growth Partners Europe

Certified

$$$$$ London, Europe

Rated by 16

3.9 3.6 3.1 2.9 3.5

3.4

GRP Partners

Certified

$$$$$ Los Angeles, US West

Rated by 17

3.5 3.4 3.4 3.5 3.2

3.4

Scale Venture Partners

Certified

$$$$$ Foster City, US West

Rated by 27

3.6 2.9 2.9 3.9 3.2

3.3

The Founders Fund

Certified

$$$$$ San Francisco, US West

Rated by 39

3.4 3.4 2.9 3.4 3.5

3.3

Polaris Venture Partners

 

$$$$$ Waltham, US East

Rated by 15

3.8 3.1 2.9 3.2 3.6

3.3

Azure Capital Partners

Certified

$$$$$ San Francisco, US West

Rated by 10

3.2 3.2 3.2 3.5 3.4

3.3

Adams Capital Management, Inc.

 

$$$$$ Sewickley, US East

Rated by 10

3.6 3.4 3.2 3.0 3.2

3.3

Noro-Moseley Partners

Certified

$$$$$ Atlanta, US East

Rated by 38

3.0 3.6 3.3 3.0 3.5

3.3

Hummer Winblad Venture Partners

Certified

$$$$$ San Francisco, US West

Rated by 23

3.3 3.4 3.0 3.4 3.3

3.3

Allegis Capital

Certified

$$$$$ Palo Alto, US West

Rated by 48

3.6 3.2 3.2 3.0 3.7

3.3

Bessemer Venture Partners

Certified

$$$$$ Larchmont, US East

Rated by 39

3.6 3.4 3.3 3.1 3.3

3.3

Foundation Capital

Certified

$$$$$ Menlo Park, US West

Rated by 34

3.4 3.5 3.2 3.2 3.4

3.3

InterWest Partners

Certified

$$$$$ Menlo Park, US West

Rated by 14

3.6 3.5 3.5 2.8 3.4

3.3

Meritage Funds

Certified

$$$$$ Denver, US West

Rated by 47

3.5 3.5 3.0 3.0 3.2

3.2

Mayfield Fund

 

$$$$$ Menlo Park, US West

Rated by 10

2.6 3.4 3.6 3.2 2.9

3.2

Palomar Ventures

 

$$$$$ Santa Monica, US West

Rated by 25

3.4 3.1 3.0 3.3 3.1

3.2

Sigma Partners

 

$$$$$ Menlo Park, US West

Rated by 31

3.1 3.1 2.9 3.2 3.4

3.2

BlueRun Ventures

Certified

$$$$$ Menlo Park, US West

Rated by 33

2.9 3.3 3.4 3.3 3.2

3.2

Opus Capital

Certified

$$$$$ Menlo Park, US West

Rated by 13

3.0 2.6 3.8 3.3 3.1

3.2

Kepha Partners

Certified

$$$$$ Waltham, US East

Rated by 10

3.6 3.5 3.2 2.2 3.5

3.2

Sequoia Capital Israel

 

$$$$$ Oceanos Hotel, ..., ME / Africa

Rated by 26

3.3 3.3 3.3 2.6 3.1

3.1

Union Square Ventures

 

$$$$$ New York, US East

Rated by 14

3.4 3.2 3.5 2.8 2.4

3.1

Trident Capital

Certified

$$$$$ Palo Alto, US West

Rated by 29

3.6 3.2 2.8 3.1 2.8

3.1

Draper Fisher Jurvetson Gotham Ventures

Certified

$$$$$ New York, US East

Rated by 42

3.8 3.1 2.8 3.1 2.6

3.1

Accel Partners

Certified

$$$$$ Palo Alto, US West

Rated by 20

3.4 2.8 3.1 3.3 2.9

3.1

Sutter Hill Ventures

Certified

$$$$$ Palo Alto, US West

Rated by 22

3.3 3.4 3.2 2.5 3.1

3.1

Emergence Capital Partners

Certified

$$$$$ San Mateo, US West

Rated by 13

3.5 3.2 3.6 3.0 2.1

3.1

Balderton (Benchmark EU)

Certified

$$$$$ London, Europe

Rated by 51

3.4 2.6 3.0 3.1 2.8

3.0

Draper Fisher Jurvetson

Certified

$$$$$ Menlo Park, US West

Rated by 23

3.7 2.6 2.9 2.7 3.0

3.0

Matrix Partners

Certified

$$$$$ Menlo Park, US East

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According to VentureWire, the number of venture investments in Q4 2008 fell to the lowest level since after the last crash, and the amount of money invested into the whole private equity sector halved from the same quarter last year. Many of the private equity investments being made are in "secondary funds," which buy distressed portfolio positions, so the story for the relatively small segment of venture capital is probably much worse.

The reality on the street for entrepreneurs raising money is brutal. Funds take meetings, but it's clear that they are not really making investments. With limited cash in the bank and limited prospects for raising more capital, it seems that all the good VCs are waiting for a "home run" opportunity to walk in the door and give them a 50% valuation haircut.

There is a silver lining. Deals perceived as being a "home run" have leverage. We just closed a later stage round after nearly a year of fundraising and pulled out over $1 MM for the founders, selling some of our equity. While our valuation was lower than we would like and the terms had some other unwanted teeth, when we threatened to walk, the deal was sweetened. Our traffic numbers are strong, so we had a few VCs coming to us with offers over the last couple months

From what I can gather, the VCs needs to justify making an investment in the current recession, so they have to issue less favorable terms. They can't explain the deal to their partners or investors otherwise. My advice would be to get as much exposure and traction as possible, have a few funds come to you, then target the best investor and negotiate the secondary perks more than the primary terms. Good luck!

I just got off the phone with a friend who is founder/CEO of an early stage medical device company. His company is doing well and recently received a couple of term sheets for his first institutional round. As he was going through the process of negotiating with the potential investors, he said they were trying to set his expectations low. He told me a story about how one investor recounted tales of startups making mass layoffs, cutting back everywhere and generally dire conditions (basically sending the message that he should be happy to be getting an offer).

So my friend responded, "Wow, that sounds terrible. This must be really affecting you badly...how many people have you had to layoff here""

The VC stared at him with a bewildered look.

Read more here.

I just finished writing this post about how startup failures are up. Not surprisingly Q4 2008 (already) is the biggest month for startup failures in the past 10 quarters.

http://www.altgate.com/blog/2008/10/triage.html

I just wrote this post on how venture investors decide which companies in their portfolio to let die, continue to fund or leave alone.