capitalBLOG

Web 2.0 VC Map: Benchmark, Sequoia, & Omidyar Network

March 21, 2007 on 5:47 pm | In Investor Analysis, In the news, Board Member Analysis, Web 2.0 |

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… 

Top VC Web 2.0 Investment Map.  Notes: (1) Omidyar Network has the most ties to Angel investors (note bright yellow cluster at top); (2) Peter Thiel forms the lone Angel tie to Sequoia & Benchmark; and (3) Benchmark forms a bridge between all VC firms (as a linking VC co-investor). 

Commentary: Omidyar Network as a relatively young VC Firm seem more prone to invest with Angel Investors.  Benchmark is a central player because they tie other VC firms together (not only because they have the most investments in the Web 2.0 space). 

Top VC Web 2.0 People Map (Board Member Ties): Notes: (1) Omidyar & Benchmark board interlocks: David Sze (Greylock), Jeremy Levine (Bessemer), and Bob Kagle (Benchmark); (2) Benchmark & Sequoia board interlocks: Venky Ganesan (Globespan) & Bud Colligan (Accel); (3) Sequoia board interlocks of partners Roelof Boetha (YouTube, Xoom, & InsiderPages) & Jim Goetz (Clearwell Systems & AdMob); and (4) Tony Nethercutt as the lone Management team member with connections on the map (Former VP Advertising Sales at YouTube, Current VP Sales at AdMob). 

Commentary: The linking outside board members are from other VC firms (with the exception of Bob Kagle (Benchmark) - this indicates that the importance of other VC firms in the direction of Web 2.0 companies.  Sequoia seems to have more control over their Web 2.0 companies as noted by their internal board interlocks.