We’ve been working on Deloitte’s Fast 50 competition over the summer which tracks the revenue growth of the UK’s fastest growing technology companies over a five year period. (We are officially crazy people).

We thought many companies would be reluctant to enter this year – every time I open the paper I hear the economy has collapsed. It can’t have escaped the attention of other entrepreneurs in the UK.

Some were, but as we go through this year’s crop of Fast 50 entrants we were astonished. I am not going to spoil the surprise here (and we have been sworn to secrecy about the Fast 50) but it seems some companies have been doing extraordinarily well.

In fact, if we compare 2009 with 2008 across the top 150 entries, less than half the 2008 entrants would make it into the top 150.

Good to hear that not everyone has been listening to Robert Peston for the last year.

Come on! This is absurd. 12 (secret but hinted at vaguely) benchmark indices are combined in some bizarre way to produce the biggest piece of BS imaginable.

Red Herring - taking the name too literally?

True, many of these firms are among the best in the business but how can anyone produce such a piece of ridiculous nonsense and expect it to have any weight without publishing some sort of methodology. The reality of this list is that VCs can only ultimately be measured on one metric, LP returns. No investor would share something like that for a list so you have to make it up and rely on what you are told.

I know some of these funds are walking dead already – and how on earth can you produce a list that does not include Union Square Ventures (Brad Burnham, Fred Wilson and Albert Wenger), probably one of the most innovative venture investors of recent times with a portfolio including Boxee, Covestor, Twitter and Zemanta amongst others.

“Top 100 Global Venture Capitalists

01. Accel Partners

02. Softbank

03. Index Ventures

04. Sequoia Capital

05. Kleiner Perkins Caufield & Byers

06. DCM

07. Insight Venture Partners

08. Draper Fisher Jurveston

09. Sofinnova Partners

10. Matrix Partners

11. New Enterprise Associates

12. Bessemer Venture Capital

13. Greylock Partners

14. Wellington Partners

15. Khosla Ventures

16. Norwest Venture Partners

17. Benchmark Capital

18. TVM Capital

19. Battery Ventures

20. Lightspeed Venture Capital

21. August Capital

22. Pitango Venture Capital

23. GRP Partners

24. IDGVC Venture Partners

25. Alta Partners

26. Trident Capital

27. Institutional Venture Partners

28. Allegis Capital

29. Legend Capital

30. Reliance Technology Ventures

31. InterWest Partners

32. Mangrove Partners

33. Banexi Ventures

34. Technology Crossover Partners

35. Foundation Capital

36. Charles River Ventures

37. Mayfield Venture Capital

38. JAFCO Ventures

39. Redpoint Ventures

40. Menlo Ventures

41. Azure Capital Partners

42. Oak Investment Partners

43. US Venture Partners

44. Balderton Capital Management

45. Mohr Davidow Ventures

46. Carmel Ventures

47. Amadeus Capital Partners

48. Globespan Capital Partners

49. BDC Venture

50. Venrock Associates

51. Canaan Partners

52. CDH Ventures

53. FTQ

54. Polaris Venture Partners

55. General Catalyst Partners

56. Sierra Ventures

57. CDC Innovation

58. Atlas Ventures

59. Globis Capital

60. Highland Capital Partners

61. Crescendo Ventures

62. Ignition Partners

63. Nexus India Capital

64. Trinity ventures

65. Hummer Winblad Venture Partners

66. Sigma Partners

67. Allen Buckridge Ventures

68. Walden International

69. Northern Light Venture Capital

70. Doughty Hanson Technology Ventures

71. Morgenthaler Ventures

72. CMEA Ventures

73. KTB Venture

74. Tallwood Venture Capital

75. ATA Ventures

76. Shenzen Capital Group

77. Vengrowth Capital Fund

78. Early Bird

79. Jerusalem Venture Partners

80. Advent Ventures

81. Northzone Capital

82. Southern Cross Venture Partners

83. Emergence Capital Partners

84. Artiman Ventures

85. GSR Venture

86. Bluerun Ventures

87. GGV Capital

88. Garnett and Helfrich Capital

89. Granite Ventures

90. Vantage Point Venture Partners

91. Shasta Ventures

92. iGlobe Partners

93. DN Capital

94. Northcap Partners

95. Partech Ventures

96. Scale Venture Partners

97. Mustang Ventures

98. Gemini Israel Fund

99. Gabriel Venture Partners

100. Zone Venture Capital”

If you make up a list, either, (a) make the criteria transparent, or (b) say it is made up and list the people that made it up, then let others contribute their ideas.

Given the huge amount of interesting deals out there (see previous post), how can you maximise your chances of getting your hands on investor cash?

Interesting insight last night from investors at our  BLN discussion dinner in Cambridge. Guests included active angel and venture capital investors who have all made investments this year. It was a good opportunity to see what has changed in the past 12 months and hear how investors think entrepreneurs should approach them.

Wood panel panel

Of course the basic ingredient has to be there – you need an idea that will make enough money to give an investor a reasonable return. This should be obvious even to Homer Simpson although people often lose sight of the fact. Comments from investors focused on softer stuff – here are the top three tips for raising money from investors

• Investors want honest conversations. Investors need to feel that they are talking to people that they can do business with in difficult times as well as good. Growing a business is never a simple process and people behave differently in different circumstances. One VC said over dinner that when they look at a company seriously, they will engineer a point of conflict in the discussion process. Investors look for obsession and experience in entrepreneurs and they can learn more about an entrepreneur in a high stress situation than they ever will in a nice friendly meeting. Be convinced your idea is excellent. Be committed to it and be committed to working together with your investors.

This becomes much easier if you know them first…

• Relationships. Fund raising is a highly competitive process and very few companies can leave it until the last minute to get going. It is NEVER too early to make contact with investors. VCs rely on trusted networks of people to get good ideas and you can increase your chances of fundraising by being a known entity in the first place. Find excuses to meet VCs, talk to them about your market, ask their advice, get in their faces. As a minimum, try to have three points of contact before you think about pitching. Remember though, any contact with a VC counts. Drunk, sober, formal, informal, off the record, on a conference panel, any contact will count towards an investor’s impression of you and your business.

Developing relationships is easier if people in the ecosystem know what you do and can introduce you…

• Advisers/networks. The best advisers and networks see a huge amount of entrepreneurs and have regular contact with the investor community. They have a trusted relationship with investors and can be very useful people to connect you with the right investors. Talk to them and work out which ones know what they are talking about (one good indicator is the number of deals they have worked on recently). Don’t be afraid to ask for their advice over coffee or a beer but respect the fact that they make their money by selling their expertise. By spending time with you at an early stage, you are both investing in a relationship that will only work if it is of benefit to both parties.

Our panel of investors included Andrew Nutter (Balderton), Sandy McKinnon (Pentech Ventures), Eike Marx (TLCom), Henrik Kjellin (Angel), Andrey Kessel (Amadeus). Thanks for your honesty in participating so openly.

Supporters of the workshop and discussion dinner:

BDO Stoy Hayward

Gill Jennings Every

Taylor Wessing

Talking to venture investors recently every active VC I spoke to reported that they were seeing significantly more deals this year than last. Speculation is that despite the downturn, this was due to two factors:

1. There are less funds in operating in the UK and so it is easier for active funds to be found.
2. People have lost jobs and so are turning to entrepreneurship out of necessity.

Whatever the reasons this bodes well for the future of entrepeneurship and innovation in the UK.

Green shoots or bed of thorns?

Interestingly, the reverse is true for private equity where the number of deals that PE investors are assessing seriously has fallen through the floor in the first half of the year.

1. Difficulty in agreeing acceptable valuations  to all parties in a deal (i.e. investors say management are dreaming, management say investors are too agressive).
2. Absence of debt finance to pad out deals.
3. No agreement about where the market is going and a fear that it could fall further.