Comments on: TheFunded exposes deal terms, including dreaded liquidation preference

By: Cut your legal fees using Y Combinator’s funding documents » VentureBeat

Wed, 13 Aug 2008 22:48:51 +0000

[...] the site where entrepreneurs can rate VCs, already allows startups to view funding termsheets from other companies, but you have to submit your documents first. Tags: inv:Y-Combinator [...]

By: Technology Transfer Tactics » Website exposes deal terms of VC investments

Technology Transfer Tactics » Website exposes deal terms of VC investments — Thu, 13 Mar 2008 15:18:24 +0000

[...] Before selecting a VC partner for a start-up or signing off on terms of a deal, it may be worth your while to spend some time perusing a web site called TheFunded (http://www.thefunded.com). The site has more than 5,000 members who offer ratings of VCs they’ve dealt with using one to five dollar signs. The ratings are similar to those commonly seen on hotel, travel, and restaurant review web pages, including written comments that accompany the individual ratings. The site has become well known and much-debated among entrepreneurs and investors, particularly in the deal-centric Silicon Valley. Its founder, Adeo Ressi, spent months keeping his identity a secret and keeping the rumor mill busy, then orchestrated an “unveiling” attended by business media and high-powered deal makers. And now, in what could be a major coup for those seeking deal benchmarks, TheFunded just launched a new feature that lets subscribers submit the terms of their funding deals to the site for all to see and compare against their own deals. Data submissions include the amount of capital raised and the valuations VCs have arrived at before investing — the so-called “pre-money” valuation. Only members (membership is free) can access the information, and before you can view the termsheets you must submit one of your own using an online template designed to hide any information that might identify a specific firm and violate a non-disclosure agreement. Along with dollar amounts, users can post details on increasingly common clauses that often complicate deals. One cited by Ressi as particularly worrisome is the “liquidation preference,” which requires that investors gets their money out first upon a sale. While that clause has become standard, more and more VCs are demanding multiples on their initial investment — for example, a “3x liquidation preference,” which means they get three times their invested money out before the entrepreneur sees a dime. “That’s as abusive as not showing up to meet a CEO after he flies across the country,” said Ressi, who launched the site for entrepreneurs as a way of leveling the playing field with VCs. He predicted that within 18 months, the “transparency” offered through the new feature will result in standardization of deal terms. Go to: Venture Beat [...]

By: Tom

Tom — Tue, 05 Feb 2008 11:48:16 +0000

For those who don’t know it I can also recommend Fenwick and West’s quarterly terms survey. Latest available here:
http://www.fenwick.com/publications/6.12.1.asp?vid=3

By: Cambridge Cluster » Blog Archive » Thefunded.com shares the terms for an Equity Fingerprint

Tue, 29 Jan 2008 09:31:51 +0000

[...] TheFunded.com announces the ability for entrepreneurs to post, review, and share terms issues by fundraising sources. The post was by The Founding Member. It is a move supported by VentureBeat. [...]

By: Anthony Kuhn

Anthony Kuhn — Mon, 28 Jan 2008 23:47:04 +0000

Matt:

Adeo sure is shaking things up in the VC world. No one likes change and having someone shout out “The Emporer has no clothes” as the naked VCs march down the boulevard must have a, shall we say, shriveling effect on those without their armor. Thanks for your coverage and I’ll be looking for more to come on TheFunded.com.

Anthony Kuhn

By: Steven

Steven — Mon, 28 Jan 2008 19:40:48 +0000

These guys really have an amazing site and very informative.

By: Michael

Michael — Mon, 28 Jan 2008 19:03:34 +0000

The correct URL for the Private Equity Data Center is http://www.pedatacenter.com

By: Michael

Michael — Mon, 28 Jan 2008 17:32:40 +0000

This information is not new. VC Experts.com has had the Private Equity Data Center for some time now that reveals the specific deal terms and valuations of U.S. venture backed companies. The data comes from regulatory filings such as an amended Certificate of Incorporation. At http://www.pedatacenter.com, an entrepreneur can pay as little as $50 bucks for a company profile which will disclose the all of the terms used, including pay to pay penalties, cumulative dividends, anti-dillution protection, etc. I highly suggest that any entrepreneur seeking a competitive advantage (and those who want to know which investors are willing to accept which terms) try out the database. Call 646-290-9254.

By: TheFunded Exposes Deal Terms, Including Dreaded Liquidation Preference | Matt Marshall | Voices | AllThingsD

Mon, 28 Jan 2008 13:55:51 +0000

[...] Read the rest of this post Print Sphere Comment Tagged: TheFunded, Matt Marshall, VentureBeat, venture capital | permalink [...]

By: The Funded and term sheets | Startup Addict Musings

The Funded and term sheets | Startup Addict Musings — Sun, 27 Jan 2008 23:05:07 +0000

[...] This is a boon for entrepreneurs as standardization of the term sheet is inevitable. According to VentureBeat The Funded will require a $250.00 a year subscription to access this information (well worth [...]

By: Murali Krishna Devarakonda

Murali Krishna Devarakonda — Sun, 27 Jan 2008 21:57:50 +0000

Excellent addition to ‘TheFunded.com’ – and about time too. This should really level the playing field.

There’s a strong reason to drop the “post to view” policy, which requires that you can’t view any of this ‘term sheet’ information until you post one yourself. I’m a bootstrapping entrepreneur who has not raised VC money yet, even though I’ve been a founder previously. Also, I founded a group called “Agile Entrepreneurs”, where founders of startups who are primarily bootstrapping gather to share advice and information to help each other. Our entire group of about 50 entrepreneurs would benefit immensely from seeing the term sheet information. But with the “Post to view” condition, those who most need the information – the vast majority of our bootstrapping, first-time entrepreneurs – will be denied access to it.

The Funded.com needs to reconsider drop “Post to View” policy immediately.

By: Berto

Berto — Sun, 27 Jan 2008 18:10:00 +0000

I read about these guys in Inc. Great idea, and reading reviews on the lower-rated VCs is even entertaining.

But man this site is ugly!

Just because it involves money doesn’t mean it needs to be green. If this site wants to get taken seriously, it needs to ditch the noisy colors, blog-like layout, and ridiculous graphics and shapes.

A change in look will enable this site to get to the next level. But as for now, it feels like 1998.

By: Barrie Harrop

Barrie Harrop — Sun, 27 Jan 2008 13:06:12 +0000

this is a great capability to redress the balance/fairness required in the way VC’s deal with funding applicants.