The 2008 Inc. 500 Investor's Guide

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Seattle
2007 revenue: $50.5 million
What it does: Makes games that can be played online or downloaded

"The classic technology sectors -- like IT and software -- are not as strong as they used to be, because technology is becoming more commoditized and more globalized," Furneaux says. "But there are still areas in tech that are attractive, and the gaming world is a bright spot. My kids use Big Fish Games, and I think it's a really interesting phenomenon: These guys build a bunch of games, put up a site, and, presto, in just five years they're doing $50 million in revenue."

Brad Feld is managing director of Foundry Group in Boulder, Colorado. The firm's $225 million fund focuses on early stage and seed investments in North America. Feld also co-founded and manages Mobius Venture Capital, a firm that backed GeoCities, VeriSign, and FeedBurner.

Consumer Products & Services

Sittercity (No. 287)

Chicago
2007 revenue: $2.6 million
What it does: Runs an online directory at which parents can search for babysitters, housekeepers, and other help

"I've met the founder, and she's building a really interesting company in what is a well-defined vertical market," Feld says. "Sittercity's model of matching service providers -- babysitters -- with consumers in a trusted way has a lot of potential. I also like that this company is still at a pretty early stage, which means that the valuation would be attractive from an investor's point of view."

Software

Winshuttle (No. 353)

Bothell, Washington
2007 revenue: $5.1 million
What it does: Makes software that pulls data from a desktop PC into an SAP enterprise system

"Of the software companies on the list, this was the most interesting to me," Feld says. "At our firm, we call this a 'glue' company, meaning it connects different software services together, and it's a theme we try to invest in."

Jim Armstrong is a managing director in the Santa Monica, California, office of Clearstone Venture Partners, which also has offices in Silicon Valley and Mumbai. The firm manages $650 million through three funds. Clearstone's past investments include PayPal and Overture.

Advertising & Marketing

Red Ventures (No. 17)

Charlotte, North Carolina
2007 revenue: $103.7 million
What it does: Identifies households that would be good sales leads for customers such as DirecTV (NASDAQ:DTV) and ADT, the home security provider

"Lead generation is a massive growth industry," Armstrong says. "The Web is really good at driving traffic, but most businesses don't want traffic -- they want customers. Internet advertising companies, including Google, haven't really thought this through. Red Ventures could eventually be in a position to create a universal technology platform for lead generation that could be used by marketers in all different industry verticals." During due diligence, Armstrong says that he would take a hard look at the company's customer mix to see how broad it is: "A lot of lead-generation companies have problems with customer concentration, meaning that they've grown large on the backs of only a few big customers."

Computers & Electronics

Cymphonix (No. 168)

Sandy, Utah
2007 revenue: $3 million
What it does: Helps large companies apportion the bandwidth employees tie up at work

"At $3 million in revenue, Cymphonix is kind of small," Armstrong says. "But as Web video and VoIP become more popular, companies are going to need to look at employees' browsing habits and set priorities for bandwidth. Some people are revolting against this type of technological control, but at the end of the day, I think it will be a growth industry."

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Max Chafkin

Senior writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York.

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