Today’s Case Study compares two large VC Firms, Kleiner Perkins Caufield & Byers (KPCB) and Sequoia Capital. The main question examines how large VCs compare in Investment and People Relational Capital, using the same format as the previous post. As before, a couple of back-of-the-envelope calculations using LinkSViewer search and LinkSV.com can help illustrate.
First, Sequoia Capital has the 2nd most Silicon Valley active portfolio companies = 132 (KPCB=111; Intel=160; NEA=120; US VP=117; Mayfield=97). Of Sequoia’s 132 active companies: 36 are Public; 15 are Acquired; and 81 are Private (KPCB = 33, 10, and 68, respectively). Given that Sequoia has 21 more active companies, these numbers are roughly equivalent from an overall percentage standpoint.
Second, I looked at the most recent funding data from LinkSV’s Funding Summary Page and compared some basic stats for KPCB (N=74) versus Sequoia (N=85): (1) Average Last Round of Total Funding: K=$16.15M; S=$13.16M; (2) Average Total Funding: K=$44.50M; S=$32.35M; (3) Average Rounds: K=2.71; S=2.66; (4) Average Number of Co-Investors: K=4.29; S=3.20. While the average number of rounds are about the same, the averages for last round (+23%), total funding (+38%) and number of co-investors (+34%) are somewhat higher for KPCB vs. Sequoia. Given that Sequoia has 15% more active companies than KPCB, the investment maps should be comparable.
Thus, I began comparing the network maps between Sequoia and KPCB. First I examined their Investment Relational Maps [Specs: (1) MinLink=6; (2) Drop Pendants; and (3) Exclude Target Node]. The resultant maps are below for KPCB and then Sequoia.
Venture Beat posted a recent interview with Intel Capital Chief of Staff Eghosa Omoigui. I had long noticed from my mapping that Intel was a bit of an albatross in the Silicon Valley Investing world. A couple of back-of-the-envelope calculations using LinkSViewer search and LinkSV.com can help illustrate.
First, Intel Capital has the most Silicon Valley active portfolio companies = 160 (Sequoia=132; NEA=120; US VP=117; KPCB=111; Mayfield=97). Of Intel’s 160 active companies: 22 are Public; 22 are Acquired (corrected); and 116 (corrected) are Private (Sequoia = 36, 15, and 81, respectively) (corrected).
Second, Intel, as a Corporate VC, exhibits different investment strategies than a traditional VC firm. I looked at the most recent funding data from LinkSV’s Funding Summary Page and compared some basic stats for Intel (N=106) versus Sequoia (N=85): (1) Average Last Round of Total Funding: I=$12.43M; S=$13.16M (corrected, numbers switched); (2) Average Total Funding: I=$48.33M; S=32.35M; (3) Average Rounds: I=3.08; S=2.66; (4) Average Number of Co-Investors: I=6.03; S=3.20. While the averages of funding per last round and number of rounds are about the same, total funding (+50%) and number of co-investors (+88%) are higher for Intel vs. Sequoia. Intel is typically involved in projects that require more total money and presumably have more investors to offset the increased risk involved. Intel also typically decreases its investments in some companies over time and shifts this money to new investments.
I began comparing the network maps between Sequoia and Intel. First I examined their Investment Relational Maps [Specs: (1) MinLink=6; (2) Drop Pendants; and (3) Exclude Target Node]. The resultant maps are below for Intel and then Sequoia.
The titles get even cornier…recalling my college days writing punny space-constrained headlines as a sports page copy editor at the UCLA Daily Bruin (burning whatever “free” time I had as an EE). This post refers to Cisco’s recent acquisition of XML gateway technology company Reactivity for $135M. I decided to map the two together. I performed a LinkSViewer Quick Search for Cisco, Reactivity. From the Results page, I clicked on Cisco as an Investor and Reactivity as a Company. Then I displayed their relational map, filtered out private companies, and dropped pendants for the below Relational Map:
Cavium Networks recently filed for IPO status. What does its investment network look like? I mapped its Investment Relational Map, included inactive companies in the Company Filter, and Added Capital Information + Number of Total Investors and Investments from the Map Options. The resultant Map is below.
I recently stumbled upon an interesting map of “the Google” network. I first looked at the Google Company Map displaying companies as connected by a common investor and board member (Orange Links) with the Google Target Node Excluded. This map is below:
Kinda cool. From a network analytic perspective, the above map highlights PodShow as a liaison tie between the left and right cliques in the above Google Company Map - it connects two clusters without being a part of either cluster. Plaxo, eLance, and Zazzle are bridges in the network because they connect the left and right cliques together, but are a part of one of the cliques. [Note: Bonus Question for someone who wants to post a comment - we removed the registration requirement: What ties the left, center, and right cliques together?]
Intrigued, I then clicked to the Relational Map of Google, Dropped Pendants, and began increasing the MinLink (+) to isolate strong ties. I stopped at MinLink = 4 and this result is the below Map O’ the Day:
Here we see the strong-tie capital relations of Google. Note the ties to PodShow: (1) Sequoia Capital as investor; (2) Kleiner Perkins as investor; (3) Sherpalo Ventures as investor; and (4) Ram Shriram (Sherpalo Ventures) as board member. In fact, PodShow and Google are the only companies to combine the power investor triumvirate of Sequoia, Kleiner, and Sherpalo (Sherpalo being a fairly new VC Firm). The PodShow common investor and board ties thus make it the “closest thing to Google” from a relational capital perspective.
Another new feature to LinkSViewer 1.2 is the Exclude Target Node check box. This feature can help reduce the clutter from busy maps by removing the dependence on the targeted node. This feature can be illustrated using the example of Mohr, Davidow Ventures strong ties. The purpose here is to identify the strong ties of Mohr Davidow with other VC firms: Who do they co-invest with the most (at least 3 active co-investments)? What active companies are tied to these strong-tie co-investors? We set the MinLink to 3 to indicate only those investors that are tied to 3 or more active deals with Mohr Davidow and Dropped Pendants. The resultant Investor Relational Map is below.
We recently updated LinkSViewer to include LinkSV people profile information. The people profiles, company summaries, and investment firm summaries are also now all available from the Information Window in LinkSViewer (which we spruced up a bit). This should improve the functionality of the site and speed up the navigation process for users.
By double-clicking on any person node in the map, their LinkSV.com profile pops up in a new window. The profile allows immediate access LinkSV’s Web-accessible information on their background, boards, and investments. It also links to other available information such as their Web bio, company Website + address, LinkedIn record, and Jigsaw contact information. Here is an Example LinkSV Profile (full-screen).
Double click on a person (board or management team member) the next time you map, it should be useful. More new stuff to come…
Steve O’ Hear at ZDNet wrote a thoughtful and intriguing post regarding the prominence of Silicon Valley investing in social software and media companies (and high-tech in general). Steve’s main point is to follow the money - that while the referenced New York Times article highlights the Valley as a reemergent hotbed for high-tech companies, this is in most part due to the high-tech investment machine located in the Valley. If you haven’t already, I highly encourage you to read Steve’s post - it is one of the more omniscient posts I have read in a while (not because he referenced our maps, but use them to illustrate a profound point). Zonk at SlashDot posted a follow-up question, “Is the success of Valley-area projects the result of a more creative environment, or is the cachet of the area (and the resulting money) the reason behind their success?”
My response leans toward the latter, that the cachet and the resulting money is the driving force behind the innovative success of the Silicon Valley. This echoes Steve’s main point, but I would like to elaborate from a network perspective. Some examples can help illustrate:
We recently got a plug on the Google Blogoscoped blog. An early comment on this blog compares LinkSViewer to theyrule.net, which doesn’t have Google listed, only incorporates board relationships, and takes forever to load. Don’t get me wrong, theyrule.net is a cool site with many nice features, but I consider it more of a political advocacy site versus our relational capital site geared toward the Silicon Valley investment community.
I use this post to showcase some interesting Google People Network Maps and highlight practical applications of the maps. This first is the People Relational Map of Google with pendants dropped (both current and former board and management teams included) - this is the map referenced on Blogoscoped:
Stimulated by a lively conversation on a Venture Beat post, “Filmloop’s demise, the reputation of VCs, and how you can help,” I explored the Silicon Valley Board ties of ComVentures’ Roland Van der Meer. I have no opinion on this subject and only wish to illustrate his board relationships. I filtered-in inactive companies and his former boards. The resultant relational map is below: