The dirty little secrets about VCs, at TheFunded
TheFunded is a Web site that rates venture capitalists, giving entrepreneurs more information about whether or not to take money from a particular VC — This is a very useful service to have, because the venture process is still secretive …
Context & Ripple Effects
On the same day VentureBeat wrote this up, TechCrunch ran its own "Reckoning Day" take on what founder reviews mean for VCs, so the launch traveled immediately across both major startup outlets. The premise is simple and pointed: the venture process has long been secretive in one direction — VCs diligence founders extensively while founders choose their investors nearly blind.
First-order effects
- Entrepreneurs evaluating term sheets can now check partner-level ratings before signing with a firm, converting an opaque decision into one informed by peers who already took that money.
- Individual VCs become publicly reviewable for the first time, putting their conduct inside portfolio companies on the record rather than in hallway gossip.
Second-order effects
- Firms whose partners rate poorly face harder closes as informed founders route toward better-reviewed investors, pressuring the rest of the partnership to manage reputation actively.
- A market forms around founder-side intelligence on investors, inviting imitators and forcing VCs to treat how they treat founders as a competitive variable, not just a private matter.
Third-order effects
- If founder reviews become a durable institution, the structural asymmetry of fundraising narrows: capital allocators get graded by the entrepreneurs they fund, the way founders have always been graded by VCs.
- Whether anonymous review models hold up against gaming and retaliation is the open question that will decide if this becomes standard infrastructure or a niche experiment.
The trend: Fundraising is turning into a two-sided reputation market where founders rate capital providers just as rigorously as VCs rate startups.