VC money keeps rolling in. Too much?

The VC money just keeps pouring in to the Bay Area. The latest beneficiary: Network Physics, of Mountain View which uses the principles of high energy physics to help manage network applications for companies. Today, it announced it has raised $13 million in venture capital. Larry Orr, general partner of Trinity Ventures, led the round and will join Network Physics’ board. See www.networkphysics.com.

We sat down last week with Jerry and Justin Camp, the father and son founders of CampVentures, a small Los Altos-based angel firm that gives start-ups seed funding. They worried the amount of VC money swashing around is getting out of control. Their Exhibit A was a local company called Everest Microsystems. The company hadn’t even met CampVentures’ criteria for a seed investment — which includes a careful vetting of the team and business model — when it started seeking a big round of venture capital from a large Taiwanese non-VC investor. Camp advised it to shy away from the money, and to instead seek “smart” money from a real VC. Everest obliged, but went right out and raised $15 million from VC firm New Enterpirse Associates — skipping the seed round entirely. It’s a sign, the Camps say, that there’s too much money prowling for too few good companies: “We are seeing a return to some negative behavior,” said Justin Camp.