By David Sims, TMCnet Contributing Editor

A recent video of an interview posted on a Phone (News - Alert).com blog has Erick Schonfeld from TechCrunch talking to Founder Friendly (ff) Venture Capital principals John Frankel and David Teten. Schonfeld reported that ff closed its second $27 million fund last November, Schonfeld talked to the two men about their approach to virtual office investing.

Starting with $6.3 million in 2008, Frankel and Teten put ff up as the top-performing venture fund through the end of 2010, according to Preqin, with a net IRR in the high-40 percent range.

Explaining how what they do differs from other investors, Teten pointed out that in the video many other investors look for what the industry calls themes and will look for what seems to be the dominant theme. The investors will then search for a company that is using that popular theme.

“We think that’s not a healthy approach and you’re investing in probably player #4,” Teten said, explaining that if the sector’s defined that means there are already top players in it.

When looking for what’s going to be growing in 2017, he said, you have to look to the entrepreneurs. “We filter them, identify the ones that are really promising, and then we’ll invest in them.” As Frankel said, “Our teams drive our themes.” He emphasized the importance of being involved in the companies, examining virtual office business plans, instead of just being a passive check.

According to ff’s description, they are focused on companies that can be the low cost disruptive player in their industry. Phone.com (News - Alert) fits this profile, and secured funding as a result.

Outperforming returns come from staying focused, says Frankel, who was an angel investor and before that worked at Goldman Sachs. And of course they collect their share of data and analytics, but as Schonfeld said, the entrepreneur comes first.

“We don’t think about the world by themes.” Teten re-emphasized to Schonfeld. “Our approach is the people who know the most about growth sectors are the entrepreneurs.