So did the editors of Thomson Reuters’ Venture Capital Journal, who just released their inaugural edition of the “VCJ 20,” a list of the 20 most-promising startups funded by U.S.-based investors in 2009.
“As journalists, we’re constantly second guessing investments made by VCs,” wrote VCJ Editor-in-Chief Lawrence Aragon, who led a team of 6 that crafted its list of 20 from an initial group that included more than 1,200 startups. “The goal of this project is to find out if we really are as smart as we think we are, or are as dumb as rocks when it comes to picking good deals.”
Aragon said his team focused on five factors when rating each company: potential market size, quality of the team, technology edge, business model and exit potential. Each startup was awarded a score from 1-5 in each of the five categories, up to a maximum score of 25.
Aragon and his fellow VCJ evaluators gave themselves $20 million “virtual dollars” to invest in 20 companies that raised seed or Series A funds in 2009. Aragon said his team will track the progress of these startups over the year, adding: “Like a real venture fund, we expect our virtual fund to have its share of hits and misses.”
The No. 1 company, Cloudera Inc., was awarded a total of 24 out of 25 points. Cloudera is an enterprise software company that incorporates the popular Hadoop data-processing software platform, used by Yahoo and Facebook. Aragon said Cloudera’s “very strong exit potential” was a key factor in its top ranking.
Rounding out the top 5 were:
- Cloudera: Provides services and support for Hadoop
- Pixazza: Develops an e-commerce enabling platform for photos posted online
- On-Q-ity: Develops diagnostic tools for the treatment of cancer patients
- Organic Motion: Provides computer vision and marker-less motion capture systems
- General Fusion: Attempting to create a fusion-powered electrical generator
Full profiles of the VCJ 20 can be viewed here.
VCJ 20: Most Promising Startups