A lot of venture capitalists and super angels are not only active investors, but also active bloggers. Below is a list of the top 20 VC power bloggers as compiled by Larry Cheng of Volition Capital based on traffic data from Compete. The metric being used here is average monthly unique visitors during the fourth quarter of 2010.

Compared to last year’s list, there’s been a big shakeup in the VC blogging world. Paul Graham of Y Combinator took the top spot, pushing Fred Wilson of Union Square Ventures to No. 2. And four new names appear in the top ten, including Chris Dixon (Founder Collective), Ben Horowitz (Andreessen Horowitz), Charlie O’Donnell (First Round Capital), and Larry Cheng himself. They pushed down Bill Gurley (Benchmark), Josh Kopelman (First Round), Bijan Sabet (Spark)—who are all still in the top 20—and Guy Kawasaki (who was pulled off the list because he is not as active as a VC anymore).

The bigger change is that many VC blogs saw a drop in audience across the board. I suspect this is because many of them stopped blogging as much as they used to. Out of the VC blogs that Compete had enough data on, about 72 percent saw a drop-off in traffic. Only nine VC bloggers increased their traffic by more than 1,000 readers per month, including Graham, Dixon, Horowitz, Mark Suster, and Jeff Bussgang (see bolded names in the list below). You can read the full list of all 73 VC blogs on Cheng’s blog. Which is your favorite VC power blogger and why?

1. Paul Graham (@paulg), YCombinator, Essays (97,227)
2. Fred Wilson (@fredwilson), Union Square Ventures, A VC (81,483)
3. Mark Suster (@msuster), GRP Partners, Both Sides of the Table (53,655)

1. Will a VC sign an NDA (non-disclosure agreement)? No. If they did they would be in constant violation because VCs often see 3-4+ companies in every market that they operation.  NDAs would make it impossible to do business.   Asking for one to be signed shows naïveté.

2. What is the VC process?

• Meet with one person from the firm – partner or associate.  If you can meet a partner up front it’s always best but sometimes it’s not possible.  The first meeting will often by with an analyst, associate or principal.  Often principals are allowed to do their own deals whereas associates are not.  Associates are good an important people – I discuss this in the video.  Still, “call high” if you can.
• Potentially several other qualifying meetings before you get to meet the other partners if the person you have met is not yet convince / wants to do more work.
• If you make it past this stage you will go to a “full partners meeting” which is exactly what it sounds like.  In the video I describe how to best play this meeting and why, without a champion going into the meeting, you’re unlikely to get an investment.
• After the partners’ meeting you should usually get a pretty good steer on where you’re at in the process.  If you don’t, make sure you follow up and ask for feedback
• If they say yes you get a term sheet and once this is signed it is usually 3-6 weeks until your legal docs get signed and you’re funded.

One of my mentors in the VC business used to say "the success of an investment is in inverse proportion to the number of VCs on the board."

I love that line and use it often. One or two VCs on your board is OK. Four or five is a disaster.

But beyond the board, what about the syndicate? I've seen some recent financings where there were six or more VCs firms in the syndicate. And that doesn't include the angels.

We've been asked to participate in first round syndicates with four or more VC firms and we have not done that, at least yet. I thought I'd explain why.

Most entrepreneurs don't want to dilute more than 25-33% for a single round of financing. And good for them. They shouldn't.

Let's take the high end of that band (33%) and divide it by four, or five, or six. If you have that many VC firms in your syndicate, then each one will own something like 5-7.5% of the company. That's not a lot of equity for most firms.

In the race to attract attention from startups and entrepreneurs, angel investors appear to be winning, and that’s accelerating an ongoing shift in the venture capital market — what some would argue is an evolution of the startup-funding model. A new survey from Dorsey & Whitney (PDF), a Silicon Valley law firm that specializes in advising startups, shows that startups are increasingly turning to angels, not just for their initial rounds of funding but for subsequent rounds as well. Meanwhile, the most recent data on the VC industry shows that traditional venture funds have only raised $9 billion so far this year, a significant drop from the amount raised in previous years. Insiders have been arguing for some time that the VC business needed to get smaller, and it appears to be doing that in more ways than one.

The latest figures from the National Venture Capital Association show that the amount raised by traditional funds in the first three quarters of 2010 is just a little over half the $16 billion they accumulated in all of 2009, and dramatically lower than the $28 billion that was raised in 2008, or the $35 billion that traditional funds managed to pull in during 2007. NVCA President Mark Heesen said the industry was “experiencing a period of time in which venture capital investment is consistently outpacing fundraising, creating an industry that will be considerably smaller in the next decade.”

According to a report distributed by the Angel Capital Education Foundation, total startup funding from venture capital funds, state funds, and angel investors totals approximately $20.8 billion annually.

Surprisingly, friends and family contributed nearly three times the amount of capital to thousands of startups each year.

With approximately $60 billion in startup funding coming from friends and family, entrepreneurs must consider this as an option as they seek to launch new businesses.

Money issues between friends and family can ruin relationships. Due to the risk involved with investing in a startup, if you are requesting investment from friends and family, be sure to consider these five steps before you begin the capital raising process:

1. Prepare a pitch. Just because you are requesting investment from your mom or a group of your college buddies doesn’t give you an excuse to be unprofessional. Take this opportunity and the potential risk taken by your investor seriously. Do your homework, and prepare a professional, persuasive and passionate presentation. You want your friends and family to buy into your vision, not just hand over some cash because they feel obligated or pressured.

Back in 1999 when I first raised venture capital I had zero knowledge of what a fair term sheet looked like or how to value my company.  Due to competitive markets we ended up with a pretty good term sheet until we needed to raise money in April 2001 and then we got completely screwed.  It was accept the terms or go into bankruptcy so we took the money.  Those were the dog days of entrepreneurship.