John Doerr Michael Moritz John Thornton Ann Winblad Benchmark Capital Credit Suisse First Boston Sequoia Capital Austin Ventures, L.P. Internet Capital Group, Inc. (ICGE) Kleiner Perkins Caufield & Byers Accel Partners Infinity Broadcasting Corporation (INF) Market Download (May 29, 2000) Deal Watch (May 29, 2000) Built to Last (May 29, 2000) Venture Capital Scorecard (May 29, 2000) Email to a Friend Print Article Write the Editor

Identifying good venture capitalists based on past performance can help investors piggyback on the knowledge and experience of those VCs. This is especially true for VCs who pick a winning investment in a company's earliest stages.

We began our evaluation with a universe of 330 Internet IPOs from 1995 through the end of 1999, excluding data communications and network equipment companies. Using VentureOne's database, we noted the first individual lead VC to join each company's board, then selected the 31 VCs credited with two or more IPOs. We analyzed each VC's investment portfolio – all companies on whose boards they sat.

Who came out on top? It depends on who you ask. The VCs best able to grow their firms' coffers are often not the best from the public investor's standpoint.

In the top table, a VC with a higher batting average (or few failures in his portfolio) will be of interest to entrepreneurs or public investors who value consistency. High annualized returns and wealth creation will be of interest to the VCs and their investors who value the magnitude of the winnings.

But are these VCs necessarily the best ones for public investors to watch? In the bottom table, we rank the top 10 VCs by after-market performance of public companies in their portfolios. Institutional investors with positions in firms backed by these venture capitalists have generated excellent long-term returns. On average, the top VCs have returned nearly 470 percent annually from the offer price. On a median basis, the return is 50 percent – still above the Nasdaq's five-year annualized gain of 38 percent.

Unlike institutional investors, individuals are usually shut out of the IPO, so using the stocks' first-day close offers a better estimate for their return. The gains for individuals are smaller, but still respectable. The top VCs returned an average of 125 percent and a median of 28 percent annually from first-day close.

Given the Internet market turmoil, public investors would be wise to follow the lead of VCs who have demonstrated the ability to invest in and build lasting companies, not those with the best overall returns.

The Heroes of the Venture World ... Total performance of investments by early stage VCs. RANK NAME FIRM MEDIAN ANNUALIZED RETURN MEDIAN WEALTH CREATION PER COMPANY BATTING AVERAGE 1 William Gross Idealab 839% 1,392 0.833 2 Walter Buckley Internet Capital Group (ICGE) 408% 264 0.600 3 Andrew Verhalen Matrix 381% 284 0.917 4 Michael Brooks JH Whitney 333% 753 0.667 5 Virginia Turezyn Infinity (INF) 312% 208 0.857 6 Kevin Harvey Benchmark Capital 285% 343 0.750 7 Ted Dintersmith Charles River 224% 310 1.000 8 William Ford General Atlantic 187% 1,506 0.875 9 David Cowan Bessemer Venture Partners 178% 163 0.769 10 James Breyer Accel Partners 169% 559 0.833 11 John Thornton Austin Ventures 155% 519 0.909 12 John Walecka Redpoint Ventures 140% 112 0.611 13 Tim Barrows Matrix 134% 56 0.714 14 Jeff Brody Redpoint Ventures 125% 94 0.692 15 William Kaiser Greylock 116% 387 0.800 16 John Doerr Kleiner Perkins Caufield & Byers 113% 4,310 0.857 17 Michael Moritz Sequoia Capital 107% 170 0.700 18 Ann Winblad Hummer Winblad 104% 175 0.769 19 Frederic Harman Oak Investments 100% 741 0.800 20 Richard D'Amore North Bridge 99% 96 0.786

... Aren't the Heroes of the Public Markets Public performance of investments by early stage VCs.     MEDIAN ANNUALIZED RETURN RANK NAME FIRM IPO PRESENT FIRST-DAY CLOSE PRESENT 1 David Strohm Greylock 128% 65% 2 William Ford General Atlantic 76% 23% 3 Frederic Harman Oak Investments 74% 72% 4 Robert Hoff Crosspoint 62% 50% 5 John Doerr Kleiner Perkins Caufield & Byers 50% 37% 6 William Kaiser Greylock 37% 31% 7 David Cowan Bessemer Venture Partners 33% 22% 8 Michael Brooks JH Whitney 33% 22% 9 John Walecka Redpoint Ventures 27% -14% 10 Robert Kagle Benchmark Capital 15% 11%