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Building upon the previous theme of activity reports, I turned to SV Health-Tech companies (i.e., Biotech & Medical sectors) that received funding in March, 2007.  I mapped these companies together and then filtered for companies that only received funding in the past year.  The goal here is to find out which investors and outside board members were most recently active in the health-tech space and to illustrate their capital relations. 

First I was interested in the most recently active investors - for this I only included investors with at least 3 investments (MinLink =3) in the Biotech and Medicine sectors over the past year.  I then dropped pendants to only show the connections between these investors.  

1st Round SV Health-Tech Companies Recent Activity Investment Map (Pendants dropped, MinLink=3).  Large blue boxes indicate Health-Tech companies that were funded in March, 2007.  Small blue boxes indicate Health-Tech companies that were funded from 3/06-2/07.  Source: LinkSV.com 

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Continuing from the previous post…We now use the relations found in the previous map to investigate ‘hot company’ networks in new ways. This is based on the idea that key people and investors can help point the way to new companies. The goal of a ‘derivative network’ is to take a network of interest and ‘invert’ it to see another view of its affiliations. In each of the ensuing three derivative maps, we will be exposed to new sets of people and companies that are not in this group of ‘hot companies,’ but are related to that group through these derivative networks.

First let’s look at the networks of the three key board members identified in the previous post: Reid Hoffman, David Sze, and Bill Gurley. Q: What do these board members have in common? The goal here is to identify companies not found in the previous post map - companies that are found in the same circles as the ‘hot companies’ discussed in the last post. Along with the new people we find, all of these companies are potentially interesting, so let’s see what we can dig up.

In the last post we started with a map of company nodes. In this first derivative map we will look at the network formed by the affiliations of those companies - namely, the key board members.

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Parker’s Project Agape = Friendster + Facebook? (VentureBeat)

Matt Marshall of Venture Beat wrote an interesting item on Sean Parker’s newest venture, Project Agape.  One line (quoting Parker) in the post particularly struck my attention.

“The social graph,” he says, referring to the connection people have with others through multiple degrees, “is the critical ingredient.”

Thus, I found it fitting to illustrate Sean Parker’s network of relevant people, investor, and company connections in the Silicon Valley using LinkSViewer.  Project Agape is still relatively stealth, but there are a few key points from Matt’s earlier interview: Sean Parker’s strong ties to Peter Thiel, and their VC Firm, The Founders Fund.  From this limited info., I searched for and mapped Parker, Thiel, and The Founders Fund together (Source: LinkSV.com).  First I looked at their People Map and then their Investment Map (Pendants dropped).

People Relational Map for Peter Thiel (Investor = Yellow; Outside Board Member = Peach), Sean Parker (Investor = Yellow; Management Team Member = Rose), and The Founders Fund (Tan) - Pendants dropped.  Notes: (1) Related Outside Board Members: Michael Moritz, John Malloy, Roelof Boetha, Keith Rabois, Konstantin Guericke, Reid Hoffman, David Sze, Tim Koogle; (2) Related Management Team Members: Max Levchin; Matt Cohler; (3) Related Companies: Plaxo, Facebook, Friendster, PayPal, Poewerset, Xoom, Tagged, Slide, LinkedIn, Wink, Jaxtr, RapLeaf, Engage.com, Quantcast. 

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Moritz Steps down from Google’s board (VentureBeat)

Before one reads too much into this, let’s look at Moritz’ current & former board maps for SV companies. 

Michael Moritz Relational Map (Current Boards Only). Note how all companies are private (except PayPal). 

Michael Moritz Relational Map (Former Boards Only, Active Companies). Note how all companies are public. 

Michael Moritz Relational Map (All 25 Boards, Investors Filtered Out). Note how all inactive companies were acquired or went public (except Telegis). 

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As posted in GigaOm, there has been a mysterious change of CEO at Stoke after completing a big ($50M) round of funding with the likes of Sequoia and Kleiner. Randall Kruep is out as the CEO and now listed only as a founder. Dennis Barsema, who was on the board, is now listed as the CEO. Here’s a look at the combined network for Barsema and Kruep - see how else they are connected, and what else is involved in their network.

(Click on the map to view a live version with legend)

Barsema and Kruep probably knew each other at Redback; Kleiner probably knew Kruep at Redback… so was it a secret? Was it a surprise? Om’s right when he says “Hmmm.”

The recent Venture One & Ernst & Young report on Web 2.0 notes $844.4M in Web 2.0 VC investments in 2006 (up more than double from the previous year, see VC Ratings Post).  I set out to examine a slice of the Web 2.0 landscape using LinkSViewer.  For this I used the Company Filter feature to only include Internet Sector companies that were last funded in 2006 for the three most active Web 2.0 VC firms: Benchmark, Sequoia, & Omidyar (the other top investor, DFJ, had only one connection to the network - Glam Media connection to Accel Partners).  The resultant relational map is below (Click on image for fullsize view in a new window). 

Top VC Web 2.0 Relational Map.  Notes: (1) The inclusion of prominent Web 2.0 companies such as AdMob, Bebo.com, Digg, JAJAH, MetaCafe, Wikia, and YouTube; (2) The VC connections to Accel, Globespan, Fidelity, Bessemer, and Greylock; and (3) The Angel investor connections to Ron Conway, Marc Andreessen, Gil Penchina, Mitch Kapor, Josh Kopelman, Reid Hoffman, & Peter Thiel.   

Commentary: The people, companies, and investors in the map provide an indicator of the key players in the Web 2.0 space.  The filter of Internet companies funded in 2006 resulted in many companies in the Web 2.0 space - that the Internet and Web 2.0 are becoming more synonymous in recent times.  Realize that this only includes Silicon Valley companies (although this accounts for about 50% of all Web 2.0 investments from the Venture One report).  Realize that the maps would be different with other VC firms included, this is just a slice of the Web 2.0 space.  Angel investors are more prominent in the Web 2.0 space because there is less money needed for a startup and this fact may result in actually more Web companies taking on capital from non-VC firms (see Business 2.0 Editor Erick Schonfeld’s blog for this initial observation). 

Illustrating the connections in the above map in more detail, I used LinkSViewer to drop pendants or single-tie connections.  I then separated the above map into investors (Investment Map preset tab) and inside and outside boards (People Map preset tab).  The Investment and People Maps (with pendants dropped) ensue… 

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VoIP provider sets IPO terms (Venture Beat)

Veraz Network Investment Relational Map. Notes: (1) VC co-investment ties between Argonaut, Battery, KPCB, Levensohn, & Norwest; (2) Link to public companies Chordiant Software (Battery/Norwest), Extreme Networks (KPCB/Norwest), & Infinera (Argonaut/KPCB, recent IPO filing); and (3) Link to private companies Friendster & IP Unity (Battery/KPCB), KnowNow (KPCB/Levensohn), and Reconnex (Levensohn/Norwest).

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Emergence Capital preparing 2nd fund (VC Ratings)

Relational Map for Emergence Capital: Notes: (1) Common investments w/ Foundation and TPG (Success Factors & Ketera); (2) Board Interlocks with Emergence’s Brian Jacobs (Forbes Midas List #70) and Gordon Ritter (Forbes Midas List #34); and (3) Despite only 7 active SV portfolio companies, Emergence had two of its partners on the 2007 Midas List. 

Reference: Benchmark’s hidden booty (VC Ratings @ thedeal.com)

A couple of interesting SV company relational maps for Benchmark Capital, as mentioned in the VC Ratings post. The first examines Web 2.0 growing startup Metacafe (the subject of serious exit speculation), highlighting the successful co-investor relationship between Accel Partners and Benchmark. The second examines the ties between Infinera (recent IPO filing) and Tellme (rumored to be seeking a buyer), illustrating board interlocks.

Benchmark and Accel - Metacafe Ties and Beyond

Metacafe Relational Map (Active + Inactive companies): Accel and Benchmark ties. Note how there are no inactive private companies on the map. Telera, Northpoint, Broadbase, Collabra, and Entrisphere were all successful exits (acquisition price higher than total capital raised). Metacafe reflects a successful lineage between Accel and Benchmark.

Tellme about Infinera - Benchmark Connections

Infinera and Tellme Networks Relational Map (Active + Inactive companies): Benchmark connections. Note how there are no inactive company ties in the network. Kevin Harvey and Alex Balkanski (both at Benchmark) have multiple board interlocks. Infinera has a public company board interlock to Juniper Networks (Kenneth Goldman & Pradeep Sindu ties). Tellme Networks has a public company board interlock to Sun Microsystems (Peter Currie & Naomi Seligman ties). Both Infinera and Tellme have very similar networks (nearly structural equivalent in network terms) and are only connected by Benchmark (a node cutset in network terms).

This week’s pictures are on the recent IPO filing of Jazz Pharmaceuticals and Investor/Board Member Arthur Rock.  Believe it or not, the two were serendipitously connected (as my two favorite music genres):

Jazz Pharmaceuticals files for gutsy $172M IPO (Venture Beat)

Jazz Pharmaceuticals Investment Map (Pendants Dropped).  Jazz has a relational capital upside upon IPO because: (1) Lack of inactive companies on the map (and Novacept was a profitable exit); (2) All of the related companies are in the medical, biotech, or nanotech sectors; (3) Public company experience of Sam Colella (Versant Ventures); and (4) Relative success of the the 3 most recent IPO companies on the map (Note: Alexza Pharma recently had their IPO). 

Mike Moritz on Art Rock (VC Ratings blog @ thedeal.com citing Paul Kedrosky’s Infectious Greed blog)

Relational Map of Arthur Rock as both a Board Member and Investor.  Note the current Investor/Board tie to Arena Solutions - other than Intel, this is his only current board.  Check out Arena Solutions as a company to watch.