Matt thanks for taking the time to write such a comprehensive piece on last night. I was there too as you know and I do like the idea of having a site like this but i also believe he has to make it much more transparent. The value to the entrepreneurs could be great, yet having listened to how it is being implemented I am very skeptical about how objective it is. Time will tell.
Atul Z
· 2 years ago
A fan of TheFunded from the beginning, I don't pay too much attention to the ratings. On the other hand, suggestions and advice from fellow members has been awesome and saved me from making a couple of blunders.
Still self-funded (and struggling), we have eliminated some angel groups - Some experienced CEO's on TheFunded have shared how it is much much better to go broke than to accept from misaligned VC.
Thanks for covering the event and your crisp reports;
Barrie Harrop
· 2 years ago
The Funded is very useful,its a sounding board from others in startup mode,one has limited time to deal with time wasting VC's,so feedback on this site does save a lot time.
Steve Jobs
· 2 years ago
You said: "Ressi says he’s not making money. He has about 150 subscribers, paying about $250 a year. The rest of his members — totaling 3,480 — aren’t paying anything. All but 200 members are CEOs."
So how do you get in free? I get their nice approval email: "You have been invited to become a Premium Member of TheFunded.com..."
Is there a similar web site to this one that addresses every body elses needs that are not in the I T field Thanks for your help GL
Anthony Kuhn
· 2 years ago
Matt:
Well, never scorn an energetic serial startup entrepreneur! Ressi appears to be making in after all, despite his dislike of VCs and their money.
I linked to your piece at http://blog.innovators-network.org IN is a non-profit dedicated to bring technology to small businesses, intellectial property experts, venture capitalists, and entrepreneurs. Please visit up to help grown our community.
Best wishes,
Anthony Kuhn Innovators Network
VC Watcher
· 2 years ago
Matt, the Matrix comments are very relevant. Evaluation of an investment firm based on their ROI and exit can be out-of-date by 5 years or more, long after the partners responsible for that success may have moved on to retirement or other opportunities. Basing current experiences on old performance data is simply not sensible. As they say, "past performance is no indicator of future earnings", and that matters as much for a Sequoia (Botha) and every other Class A firm as for an entrepreneur with hat in hand.
We all deal with people, not portfolios or abstract balance sheets, and the decision to go with one startup over another often is more due to chemistry and kismet, and often whim. History and fame don't count for much when you see them only once a year at a party and every three years when you start a new venture.
The partners (with one exception) that I dealt with at Matrix when I considered it a good VC firm a half-decade ago were no longer there when I touched base on a new venture not long ago. This is not surprising, because serial entrepreneurs often do Series A fundraising only every 2-5 years, depending on how long they stay with their venture (IPO, M&A, closure), and lose touch with what's happening on Sand Hill Road while they're immersed in running the business. TheFunded brings timely news on the behavior and expectations of these firms.
And if an entrepreneur can't separate the shill and troll posts from genuine thoughtful experiences, maybe he doesn't have what it takes to make a successful entrepreneur - a good intuition and good sense.
Aaron Houghton
· 2 years ago
Matt,
Thanks for the coverage and the presentation of some pros and cons of TheFunded. I want to add a few comments about your statement that the "rating system is misleading."
I would put forward the idea that the rating system is maybe misunderstood, but not misleading.
Since TheFunded is meant to be a resource for entrepreneurs, and is clearly constructed and focused to this point, the rating system should be considered to more closely match to the needs of an entrepreneur, and not necessarily a VC. In some cases the needs of both align, in many others they do not. Just last week at a holiday dinner I dined a few seats over from a major partner at a local North Carolina VC firm. I nearly chuckled out loud when I heard him refer to web 2.0 as "a bunch of entrepreneurs trying to make 5 million dollars and sell their idea to Google." Now, I certainly understand that VCs are looking for big exits, especially the struggling funds in this region of the country, but to many entrepreneurs, 5 million dollars is still considered money. Count me among them. Entrepreneurs and VCs run companies together, evaluate markets and ideas together, and sometimes succeed together. But each brings his own definition of success to the table.
To extend this point, a VC fund without any exits may appear risky and unproven to other venture capitalists, but to an entrepreneur this type of risk and opportunity feels right at home. A ranking of VC firms by fund returns, fund volume, market segments, etc is a different kind of scale entirely. These are the numbers VCs use to compare themselves against eachother, not the numbers entrepreneurs use when selecting a Venture Capital partner.
TheFunded puts the responsibility of giving honest feedback in the hands of the people who will benefit from it most. This and a variety of other controls and alignment should result in generally high quality feedback, and more importantly, the de-valuation of low quality feedback so that it is identified to be such by readers. Thus, I hardly find it negative to hear that a VC would request that a portfolio company rate them on TheFunded. As a founder of VC funded startup, I received a similar request from one of our funders. I have yet to make a post but when I do I will be sure that my review is honest and will assist other entrepreneurs when they evaluate the fund. Since angry entrepreneurs are more likely to make a post, it's only fair for VCs to ask the entrepreneurs they do fund to make a review as well. The site is called THE Funded. The ability to speak anonymously and make my post on my schedule will protect my ability to give honest feedback.
Finally, entrepreneurs are smart enough to understand what's good for them and what's not. The point that a VC who "is a hardass... prods with entrepreneurs... with unpleaseant persistence" may create negative feedback is shortsighted. For instance, earlier in this article the entrepreneurs' request for quick and honest feedback, a theme found throughout the comments on TheFunded, shows little interest in hand-holding and flowery receptions, but instead a need for honest and clearly "unpleasant" communication. No entrepreneur finds being told NO to be pleasant, but all will come to appreciate it when it comes without undue delay.
Additionally, seeing that Sequoia is rated at 3.9 doesn't surprise me a bit. Personally, my startup would never have been funded by Sequoia, but further, it's highly likely we would have turned down a term sheet from them if we'd received one. To be honest, we didn't even pitch Sequoia, but we did receive a term sheet from another firm anyone would consider a top-tier VC. To many entrepreneurs, firms of this size, generally known to be a bit controlling and extremely tight in their deal terms, are simply not a good fit. It feels just right to me to see a firm like Sequoia sit in the middle of the VC pack. For all the connections and reputation they bring to the table, there's a heap of baggage that comes along with it. For many entrepreneurs Sequoia and its peers are just right, for others they're too hot or cold.
Now, with the TheFunded, entrepreneurs have the tools they need to make educated decisions based on both personal and peer experiences... the same type of information VCs have had for years when making decisions about entrepreneurs. And with the right information, ranked on a scale of issues that matter most to entrepreneurs, the best decisions can be made more quickly and both parties can enter into a partnership based more on facts and less on emotion and hearsay. Everyone benefits from that.
All Comments
Still self-funded (and struggling), we have eliminated some angel groups - Some experienced CEO's on TheFunded have shared how it is much much better to go broke than to accept from misaligned VC.
Thanks for covering the event and your crisp reports;
So how do you get in free? I get their nice approval email: "You have been invited to become a Premium Member of TheFunded.com..."
Click their link and it's for-pay: http://www.fuckedsuit.com/thefunded.gif
Bollocks.
Well, never scorn an energetic serial startup entrepreneur! Ressi appears to be making in after all, despite his dislike of VCs and their money.
I linked to your piece at http://blog.innovators-network.org IN is a non-profit dedicated to bring technology to small businesses, intellectial property experts, venture capitalists, and entrepreneurs. Please visit up to help grown our community.
Best wishes,
Anthony Kuhn
Innovators Network
We all deal with people, not portfolios or abstract balance sheets, and the decision to go with one startup over another often is more due to chemistry and kismet, and often whim. History and fame don't count for much when you see them only once a year at a party and every three years when you start a new venture.
The partners (with one exception) that I dealt with at Matrix when I considered it a good VC firm a half-decade ago were no longer there when I touched base on a new venture not long ago. This is not surprising, because serial entrepreneurs often do Series A fundraising only every 2-5 years, depending on how long they stay with their venture (IPO, M&A, closure), and lose touch with what's happening on Sand Hill Road while they're immersed in running the business. TheFunded brings timely news on the behavior and expectations of these firms.
And if an entrepreneur can't separate the shill and troll posts from genuine thoughtful experiences, maybe he doesn't have what it takes to make a successful entrepreneur - a good intuition and good sense.
Thanks for the coverage and the presentation of some pros and cons of TheFunded. I want to add a few comments about your statement that the "rating system is misleading."
I would put forward the idea that the rating system is maybe misunderstood, but not misleading.
Since TheFunded is meant to be a resource for entrepreneurs, and is clearly constructed and focused to this point, the rating system should be considered to more closely match to the needs of an entrepreneur, and not necessarily a VC. In some cases the needs of both align, in many others they do not. Just last week at a holiday dinner I dined a few seats over from a major partner at a local North Carolina VC firm. I nearly chuckled out loud when I heard him refer to web 2.0 as "a bunch of entrepreneurs trying to make 5 million dollars and sell their idea to Google." Now, I certainly understand that VCs are looking for big exits, especially the struggling funds in this region of the country, but to many entrepreneurs, 5 million dollars is still considered money. Count me among them. Entrepreneurs and VCs run companies together, evaluate markets and ideas together, and sometimes succeed together. But each brings his own definition of success to the table.
To extend this point, a VC fund without any exits may appear risky and unproven to other venture capitalists, but to an entrepreneur this type of risk and opportunity feels right at home. A ranking of VC firms by fund returns, fund volume, market segments, etc is a different kind of scale entirely. These are the numbers VCs use to compare themselves against eachother, not the numbers entrepreneurs use when selecting a Venture Capital partner.
TheFunded puts the responsibility of giving honest feedback in the hands of the people who will benefit from it most. This and a variety of other controls and alignment should result in generally high quality feedback, and more importantly, the de-valuation of low quality feedback so that it is identified to be such by readers. Thus, I hardly find it negative to hear that a VC would request that a portfolio company rate them on TheFunded. As a founder of VC funded startup, I received a similar request from one of our funders. I have yet to make a post but when I do I will be sure that my review is honest and will assist other entrepreneurs when they evaluate the fund. Since angry entrepreneurs are more likely to make a post, it's only fair for VCs to ask the entrepreneurs they do fund to make a review as well. The site is called THE Funded. The ability to speak anonymously and make my post on my schedule will protect my ability to give honest feedback.
Finally, entrepreneurs are smart enough to understand what's good for them and what's not. The point that a VC who "is a hardass... prods with entrepreneurs... with unpleaseant persistence" may create negative feedback is shortsighted. For instance, earlier in this article the entrepreneurs' request for quick and honest feedback, a theme found throughout the comments on TheFunded, shows little interest in hand-holding and flowery receptions, but instead a need for honest and clearly "unpleasant" communication. No entrepreneur finds being told NO to be pleasant, but all will come to appreciate it when it comes without undue delay.
Additionally, seeing that Sequoia is rated at 3.9 doesn't surprise me a bit. Personally, my startup would never have been funded by Sequoia, but further, it's highly likely we would have turned down a term sheet from them if we'd received one. To be honest, we didn't even pitch Sequoia, but we did receive a term sheet from another firm anyone would consider a top-tier VC. To many entrepreneurs, firms of this size, generally known to be a bit controlling and extremely tight in their deal terms, are simply not a good fit. It feels just right to me to see a firm like Sequoia sit in the middle of the VC pack. For all the connections and reputation they bring to the table, there's a heap of baggage that comes along with it. For many entrepreneurs Sequoia and its peers are just right, for others they're too hot or cold.
Now, with the TheFunded, entrepreneurs have the tools they need to make educated decisions based on both personal and peer experiences... the same type of information VCs have had for years when making decisions about entrepreneurs. And with the right information, ranked on a scale of issues that matter most to entrepreneurs, the best decisions can be made more quickly and both parties can enter into a partnership based more on facts and less on emotion and hearsay. Everyone benefits from that.