Silicon Valley appears to be seeing a power shift from VCs to entrepreneurs.
A decade ago, The New York Times notes, entrepreneurs had to milk every possible connection to score a meeting with a venture capital firm--but today, the hottest entrepreneurs often have the upper hand, scheduling coffee dates selectively only after combing through the coverage of each of the multiple firms vying for their attention.
Each year about 15 deals account for 97% of all venture capital profits, reports the paper. So the start-ups likely to bring high margins can be more choosy about whose money they accept. That change is powering a strategic change for VC firms, the Times finds: Where VC culture once scorned self-promotion, venture capital firms are amping up efforts to stand out.
To attract both entrepreneurs and the support of institutional investors, an increasing number of top firms have in the last year hired people to handle marketing, branding, and public relations.
The Times finds the gold-star example of successful VC self-promotion to be Andreessen Horowitz. In 2010, the firm hired Margit Wennmachers, a founder of Outcast Communications, to spearhead its public relations. "To be a top five firm, you have to brand yourself," Wennmachers told the Times. "We didn't want entrepreneurs to say, 'Who are these people?' We didn't want to start a fund by 'the tall guy who invented a browser,' so we pushed for press and set up a direct communication channel with blogs."
The firm's aggressive efforts have brought extensive media coverage and big money. In just three years the firm has raised more than any other venture capital firm, the paper notes--reeling in a cool $2.7 billion--and has developed a portfolio with such big names as Pinterest, GitHub, and Fab.