TheFunded, a site that lets entrepreneurs rate venture capitalists, continues to stir things up.
EDF Ventures, a mid-sized venture capital fund in Ann Arbor, Michigan which has been reviewed negatively by several people at the site, has subpoenaed some records from TheFunded in a court action the firm is taking against an entrepreneur who left a comment.
As you’ll see below, the anonymous entrepreneur said the firm’s members “are to be avoided unless you are desperate.”
The retaliation is apparently an attempt to silence the entrepreneur, a trend at TheFunded we’ve written about before.
Previously, we also reported about a cease and desist letter sent to TheFunded by a debt firm, Hercules, but under the Communications Decency Act, TheFunded’s site doesn’t have liability for the comments left by third-parties at the site, and Hercules dropped its demands. Something similar happened with a lawyer tried to sue Avvo, a site that lets people comment on lawyers. The lawyer failed in his efforts. Now we’re seeing EDF go directly after the entrepreneur, which is a first.
A copy of the subpoena is below. I’ve also included a screenshot of TheFunded’s review page about EDF, the firm that is taking the legal action, where you’ll see the offending comment at bottom. EDM is apparently the parent company of the fund.
In a statement, Adeo Ressi, chief executive of TheFunded, vowed the action would fail, because he doesn’t store records about the identity of commenters. He said this should help the site even more, because it will encourage entrepreneurs to come forward and leave more comments:
When TheFunded was conceived, we understood that some investors might attempt to take legal action against the views of entrepreneurs. In order to prevent this form of censorship, TheFunded has been carefully designed and takes extensive measures to protect the anonymity all those who share their opinions on the fundraising experience. TheFunded does not store IP addresses, email addresses, or any other personal information associated with a Member account in any database or any file system operated by the company.
For every CEO that shares an experience, there are nine others who are hesitant. The worst stories of investor abuse remain untold, and TheFunded hopes that this test of Member anonymity will help open up floodgate.
[Disclosure: VentureBeat has a business relationship with TheFunded, including links to each other's sites]