You thought you had it rough. According to Adam Dell of Crosspoint Venture Partners, the hot topic among venture capitalists is how busy they are. But Mr. Dell is not complaining -- he is simply reacting to a problem that has become endemic to the venture business: so many deals, so little time.

"We are bombarded by so many deals and so much information," Mr. Dell said at Red Herring's Venture 99 conference in Squaw Valley, California. "It's difficult to be strategic as opposed to simply reactive."

Crosspoint is not the only VC firm facing this problem. At a panel of venture capitalists, Jim Breyer of Accel Partners, Art Marks from New Enterprise Associates, Bob Kagle from Benchmark Capital, Geoffrey Yang of IVP, and Rich Shapero, also of Crosspoint, all bemoaned the business's increasingly fast pace.

Competition has obviously heated up. In the past month, three VCs have approached me to ask how fast other venture capitalists are responding to deals. The fear behind their questions was almost palpable. Each VC acknowledged that due diligence has become a thing of the past. Hearing that another firm is interested in a deal has become almost enough of a reason to invest. (That goes double if the rumored suitor is either Kleiner Perkins Caufield & Byers or Benchmark Capital.)

NO PRESSURE, MANMr. Dell did not say that Crosspoint feels pressured by its competitors, but the company has tried to increase its response time by concentrating its efforts in a few key areas: e-commerce exchanges, destination sites that "own" the customer (more on that later), and Web casting. Crosspoint does not restrict its bets to these sectors, but by clearly defining and researching segments in which it is interested, it believes it will be able to make more informed investment decisions in a shorter time frame.

In order to speed up the process even further, Mr. Dell evaluates deals in terms of "value chains." A value chain is a network of companies that participate in the production, distribution, and sale of a good or service. In the case of a book and a buyer, for example, a few key members of the value chain might include EarthLink, which provides Internet access; Yahoo, which might provide a person's home page; NetGravity, which serves up ads for book vendors on sites like Yahoo; Amazon.com, which sells the book; Net Perceptions, whose software helps Amazon.com evaluate its customer; and United Parcel Service (UPS), which delivers the book.

In this example, Mr. Dell says that Amazon.com, UPS, and, to a lesser extent, Yahoo and EarthLink, are highly prized because they interact directly with customers and, in VC jargon, "own" them. But NetGravity or Net Perceptions are less attractive to Mr. Dell because they do not deal with the customer and do not receive a piece of the transaction fee. "Looking strategically at the Web," he says, "we think the highest value lies in companies that own the customer."

RULE BREAKERSNo criteria is perfect, and Mr. Dell admits that there are obvious exceptions to his value-chain hypothesis. For instance, neither Kana Communications, which manages companies' customer email, nor Ariba, which automates the purchase of nonessential items for corporations, own their customer, but they are successful because they provide an invaluable service.

Still, Mr. Dell argues that evaluating deals in terms of value chains can help Crosspoint identify hot deals quickly. And in this kind of environment, anything that helps a VC firm cut through the noise and be the first to spot the next eBay is a good thing.