Will TheFunded be good or bad for Europe?

Next Story

CNET UK reviews Asus Eee PC 900, gives it an 8.7

London-based venture capitalist Paul Fisher today blogs (partly in response to my tweet) that TheFunded, a largely US site which rates VCs on their performance, will ultimately be as tough for entrepreneurs as for VCs. He contends that entrepreneurs will “read the funded.com and either believe it to be truly representative or treat it as proper advice. This is very far away from the wisdom of crowds.”

I won’t go into all his points, which are detailed and worth reading. But it is clear that the European VC scene is going through some big changes, as I have previously blogged.

My general thought is that TheFunded is a highly scientific exercise in its ratings mechanism but it I am wary of a site “rating” a VC as if it was all as easy as applying a slide rule to a human being’s personality.

However, if TheFunded, or a European version, is imported to Europe it will have several effects. A more competitive market – the really bad VCs, in theory, will get “found out” – and Europe could do with that kind of shakeout, mainly at a local/regional level (the quality of the pan-Euro VCs is much higher). As you can see Adeo Ressi, the founder of the TheFunded, got a big reaction when I blogged his talk at The Next Web conference, so there is clearly appetite for this.

But I am also concerned that it may also make the whole scene much more adversarial in a bad way, and import a highly aggressive Silicon Valley style which may not suit us here just yet, given that this is a much earlier, smaller community (or am I wrong?). TheFunded works because there are a lot of VCs in America to rate and review in the first place. It may not work with less than 100 (major) VCs rattling around Europe.

Then again, Angel investors in Europe would also get rated and if there is one thing we could use it’s something that sorts out the Good Angels from the Evil Ones.

  • http://www.intruders.tv Vincent

    Check out this recent interview with Adeo Ressi, the man behind The Funded, on intruder.tv http://uk.intruders.tv/The-Next-Web-Adeo-Ressi-from-TheFunded-com_a400.html

  • http://phreadz.com Kosso

    I had a good look around The Funded yesterday and went to see comments on a load of VCs I have met and pitched to. So much of what people had to say was spot on.

    Also, I was interested to see the UK/European-based investors listed there, some of whom I might now try to get in touch with/in front of for an interesting system I’ve been cooking here at home which will need some seed/angel funding soon ;)

  • http://www.seatwave.com Joe Cohen

    Mike – I find this really facinating. Entrepeneurs use handles on the funded to mask their identity – I suspect because they worry that VC’s might not like them for their next round if they write something negative.

    VC’s are very paranoid about how they are perceived in TF’d and clearly TF’d itself is hyper-paranoid about gaming of their system. So paranoid in fact they labeled my posts as suspect because they were positive (I also use my real name when I post and maybe because my posts are positive people think I am just kissing ass but I have really good investors and want people to know but this is now a long-running aside).

    My point is that everyone is scared shitless of everyone else and it’s silly. Investors go around like te CIA on rendition flights and entrpenuers carry NDA’s in their lunchpail – and no one is truth-telling.

    It’s important for people to realise that we have a cosmology in which we all need one another to exist; LPs, VC’s, and operators are interdependent – as Rodney King said, “can’t we all just get along?”

  • http://www.bubblefoundry.com Peter Robinett

    There are already several European VCs on The Funded, though only Wellington, Atlas and Index have been rated by multiple people. Maybe European entrepreneurs just need to start rating more VCs…

  • http://www.broadstuff.com alan p

    There are huge structural shifts emerging in the startup funding world from a combination of social, economic and technical forces. This is another one of them, the drive to more open-ness is probably irresistable.

    In my view the best way for the EU VC community to avoid TheFunded’s worst impact is to become more open itself.

  • Mike Butcher

    Alan p – right on. iterate faster than the other guy, right? Same applies to VCs.

  • http://www.freddestin.com Fred Destin

    So I am a VC and here is my view on theFunded: it’s way too easy to game on the one hand, and on the other hand it rates genuine posts as suspect. WTF. I think this is just pretty flawed. Simple example: the guys at Mangrove got all their CEOs to go and comment (that is because Mangrove is web savvy and decided to strike first). Don’t think they ever tried to influence them (the comments look and feel genuine) but got people they backed to post their thoughts — regardless of their level of honesty these CEOs are not really going to get medieval on their backers, are they ? You can game theFunded provided you ask enough people who like you to go and comment. In other words, how good you look will primarily depend on how much time you spend caring about what tF says about you. A bizarre mix of amateurish and wannabe scientific that just does not hit the mark. In my book, “open source venture capital” is still looking for its killer tool.

  • http://www.freddestin.com Fred Destin

    PS Joe, I love you man.

  • Mike Butcher

    @Fred – Yeah, and on that note, I believe Google are working on the Open Social Venture Capital Widget as we speak. And I can’t wait for the iPhone SDK to spawn the ‘Track Your VC’ app. LOL. ;-)

  • http://www.uebermeister.com Christoph Jaggi

    I think that there needs to be at least some transparency to the outside. While I agree with Fred Destin that TheFunded can be gamed, this is an issue of every single system and not something that is specific to TheFunded. It is a drawback that is more than compensated by the transparency it can provide. As in every industry there are companies and people that show unethical business behavior, have a problem with the truth and are more into power plays than getting things done. These companies and people need to be exposed.
    To be fair to both sides (the raters and the rated) anonymous posting should only be allowed in special cases and the context needs to be put there, so that to an outsider it he reasons for the rating are clearly understandable.

blog comments powered by Disqus