Here is a good article from Xconomy, written by Dennis Purcell who's served as a Senior Managing Partner of Aisling Capital’s Fund I, II and Fund III, on how VC firms do their thing. It's a good look at the process from an inside point of view, and gives you a better idea as to what information is used to make investment decisions by the VC.
It also give you and idea as to the size of their funnel and how many deals they can actually handle per year. It's interesting to see what decision criteria are used and who ultimately makes decisions. Of course, a primary concern is how can the deal provide necessary cash/return for the investors which has become increasingly challenging -- especially when you don't want to kill off the company in the process.
A good primer.
Posted by Bruce Lehr Aug 24th 2012