Up until now, if you wanted to see the ratings of individual venture capitalists on TheFunded, you had to be an invited member, which meant that you had to be the CEO or founder of a company (or pay $200 for six months access and prove that you are a senior adviser or consultant). But now anyone who visits the site can see the ratings for 17,000 individual VCs without logging in (before only the ratings for entire VC firms were publicly available). Only members can rate VCs.

Many of the ratings are still spare. Some VCs don’t have any, or only a couple. For instance, John Doerr at Kleiner Perkins (4.5 out of 5), only has two ratings, indicating that perhaps he is not as active as he once were (or that entrepreneurs are too scared to rate him, even anonymously). But for those who have at least three ratings, entrepreneurs can now compare them to the overall rating of their firm. It shouldn’t be any surprise that some of the big hitters in the VC world rate highly, like Sequoia Capital’s Michael Moritz (4.4 out of 5, versus 3.9 for Sequoia) or Roelof Botha (4.1). Dick Kramlich at New Enterprise Associates rates a 4.8, compared to 3.4 for his fund.

But every venture firm has some partners bringing down the average. For instance Mark Kvamme at Sequoia has an abysmal 2.9 rating, a full point below the firm’s average. Other notable VCs and their ratings (out of a maximum of 5):

Bill Tai, Charles River Ventures: 5.0
Joshua Kopelman, First Round Capital: 4.4
Fred Wilson, Union Square Ventures: 4.3
Tim Draper, Draper Fisher Jurvetson: 4.2
Steve Jurvetson, Draper Fisher Jurvetson: 3.0
John Hummer, Hummer Winblad Venture Partners: 1.2

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The Next Web conference that I ammoderating in Amsterdam just kicked off, and the first speaker was Adeo Ressi, the founder of TheFunded, the invite-only community for venture-funded CEOs to compare notes about building startups and bitch about VCs. (VCs are not allowed on the site, which inspired a mock site, the Unfunded, for them to bitch about entrepreneurs). I met him last night at a dinner for the keynote speakers (he’s the tall one in the photo). Ressi is a font of knowledge about the startup world.

Despite the broader economic rumblings, it’ s never been cheaper to start a company and there’s still a ton of venture money out there. In fact, Ressi told me that there is so much money out there for startups that VCs are now offering to partially buy out founders’ personal stakes to get deals. In effect, they are paying off the founders to pick them. Below is some of his advice for entrepreneurs from his presentation that he just finished onstage:

The only time your lawyers will be honest with you in the venture raising process is when you interview them. After that don’t trust anything they say because their motivation is to close the deal and get the fee.

Everyone needs to go and pitch a VC first and expect it to fail. That first pitch will suck no matter what. Bring a business partner who is silent. Have him or her watch the interaction. Every time the VC falls asleep or makes a derogatory statement, your partner writes that down, and you go and fix it.

All you need is a PowerPoint. Make it 20 minutes. Do not throw in detailed financial statements. You are basically throwing a giant hunk of steak into a lion’s den and rolling around in it. Numbers is their business. They will tear you apart.

VCs talk amongst themselves. Most entrepreneurs fall into the classic mistake of pitching serially. There is no such thing as confidentiality. Your materials will be seen by dozens of VCs the second you pitch. It gets worse, if a VC likes you, they will tell the other VCs that you suck. You want to hit as many funds as you can,. I recommend trying to hit 30 funds in two weeks. Typically, you will get one term sheet per 10 pitches.

I guarantee you your first term sheet will be bad. They will lowball you, then they will pressure you to sign it quickly. Hold off. Your goal now is to get the second or third term sheet. Without other offers there is no market.

VCs say we will co-invest. They are trying to share the offer. Tell them, “No. Why don’t you make me an offer? I will evaluate the offer separately.” Do not let them syndicate the deal or merge the term sheets.

There is no confidentiality. Everything you send out will be seen by your competitors.

Some good advice. If readers have more to add, please tell us in comments.

(Photo by Ernst-Jan).

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TheFunded, a site where entrepreneurs can leave anonymous feedback about their experiences with venture capitalists, has created quite a stir on Sand Hill Road. Rarely do I meet with a VC without the subject of it coming up, and how unfair it is. The fact that the site is now publishing confidential term sheet clauses as well only exacerbates the angst.

Now VCs are fighting back. Someone has launched TheUnFunded, a site that works very much like TheFunded but let’s VCs share their opinions of the entrepreneurs they meet with. The site will officially launch tomorrow (4/1), but it’s live now:

Inspired by TheFunded.com’s ability to allow entrepreneurs to anonymously rate VC firms, we thought it was only fair that investors also be able to anonymously rate startups and entrepreneurs. So we decided to launch TheUnfunded to do just that.

Only investors that can prove their identity will be allowed to join TheUnfunded, where they can anonymously provide feedback on the startups that they’ve met with along a five point scale. The fund raising process is indeed a long, difficult one. From an investors perspective there was just no way to tell how much an entrepreneurs well-crafted story matched the reality of their business. Until now.

The VC behind the site reached out to me to tell me about it, but asked to remain anonymous for now. There’s already entertaining content on the site, though:

The founder arrived 10 minutes late — and began the meeting by telling me that he just came from Sequioa (yeah, right). He then proceeded to state (five times) that his company was the next Facebook.

Wow - this guy was clueless. He started his slide deck and went on autopilot. I think he spoke for 18 minutes straight without even looking to see if I was awake. But worse than his pitching skills is his knowledge of his industry and competitors. I named four competitive companies that he never heard of.

The founder arrived on time and hit on my receptionist. My assistant came to bring him back to the board room, and the founder hit on my assistant.

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Venture capitalists already don’t much like TheFunded, a site that launched last March that lets entrepreneurs post stories about how they’ve been treated during the fund raising process.

But now they’re really going to be angry - the site is encouraging users to upload term sheets so that people can compare and contrast individual terms from each VC.

Venture capitalists have a lot of leverage negotiating terms that help them increase ROI simply because they have a firm grasp of the market. Things like liquidity preference (how much money they get out before the founders in a sale), veto rights and other preferred stock privileges can affect the long term economics of a deal substantially.

Entrepreneurs generally rely on their attorney and contacts to help them understand the current trends in terms. Now, though, TheFunded will help them by supplying even more information. Entrepreneurs will love this. VCs, not so much.

One catch, though. Entrepreneurs must upload their own term sheets before they can view others. The goal is to encourage participation, not just data downloads.

TheFunded was run anonymously until Adeo Ressi announced that he was behind it in November.

The Funded

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