Why This Worries Me
As a guy who used to work in Venture Capital, a site like TheFunded worries me. Generally speaking, Venture Capitalists go after good companies, and bad companies go after Venture Capitalists. The beauty of the internet is that if you run a terrific company, Venture Capital will eventually find you. All TheFunded insures is that more mediocre companies will have direct access to flood the inboxes of the top ranked VC’s.
And More Worries
Another concern is the possibility that only rejected entrepreneurs will have the time to contribute to TheFunded. I’m not sure why a Kevin Rose or a Chad Hurley would take the time to join the site and add their input. Furthermore, consider that there are at least ten times as many unsuccessful entrepreneurs as successful entrepreneurs – and that’s just the percentage that have been funded.
The Funded’s Odd Rankings
So how perceptive are TheFunded’s entrepreneur rankings? A quick glance at the site right now shows that Bessemer Venture Partners and Draper Fisher Jurvetson are currently the rop ranked VC’s according to the 35 entrepreneurs currently on the site. I find this a bit surprising. DFJ has a lot of egg on their face among entrepreneurs right now for funding the ethically questionable PayPerPost. PayPerPost lets advertisers pay bloggers to write positive product reviews without requiring any disclosure (for the indepth, listen to Michael Arrington debate DFJ Director Josh Stein on the ethics of PayPerPost). Meanwhile, Bessemer Venture Partners have famously passed on a host of successful startups such as Google, Apple, EBay, FedEx, Intel, Intuit, and PayPal, while greenlighting 172 companies most people haven’t heard of.
I apologize for being hard on DFJ and Bessemer; if I’ve written anything unfair feel free to correct me in the comments. My real point is to question the usefulness of TheFunded’s rankings and its service. From my VC days I know that we were far more likely to fund a company we discovered, than fund a company that discovered us.