If startup CEOs want to anonymously rate, review, and criticize venture capitalists, they can still do that on TheFunded. But the site added a feature today called TheFunded Connect that lets members help each other with what they really want: introductions to those same VCs.

CEOs looking for funding can put up brief pitches, solicit comments from other members to refine those pitches, and ultimately get personalized e-mail referrals to VCs on their list from other CEO members.

Adeo Ressi, the founder of TheFunded, cringes when I ask him if he is trying to turn his site into a social network for entrepreneurs. “God no!” he replies. But when entrepreneurs network, it is to make business connections, which is exactly the purpose of TheFunded Connect. (Perhaps it is more a business networking feature than a social one, but you get the idea).

As part of the pitch, CEOs identify how much they are hoping to raise. For instance, Erik Weaver, the CEO of Digital Ribbon (described as an “eBay for CPU Cycles”) wants to raise $1.5 million on a pre-money valuation of $5 million. Widgeteer Khris Loux, CEO of JS-Kit, wants to raise a $5 million series A. Suzanne Xie, CEO of online closet site Weardrobe, is looking for $500,000 to $1 million in angel money.

If another CEO wants to refer one of these funding seekers to a VC he knows, an email can be generated through the site (but the referrer puts in his or her own email address to make it look genuine). To help fuel these connections, whenever members look at the profile page of a venture firm that another member wants to be introduced to, they will be prompted to look at the relevant pitch.

The theory is that a personal introduction can be the breakthrough an entrepreneur needs to get a VC’s attention. Automating this process fits in with Ressi’s belief that most startups need to do 30 pitches to get three serious offers.

Whether or not this will generate any referrals, at the very least CEOs can get some feedback from their peers on their pitches. The problem is that the pitches, at least the ones up right now, are a bit spare in their details. There is little background information on the companies other than what is in the one-paragraph pitch, no bio information on the CEOs, no slide decks, and no video presentations (cough, Elevator Pitches). That makes it difficult to recommend any startup based solely on the pitches. But those elements can certainly be added, and Ressi is exploring his options there.

If Ressi can create a community where CEOs can actually help each other get funded either through helpful advice or introductions (or, in the future—why not?—pooled capital), then CEOs will keep coming back to TheFunded. If the introductions and advice go nowhere, then they’ll stick to working their Rolodexes.

TheFunded started publishing a list of top rated venture capitalists today. The ratings are based on reviews (either anonymous or not) written by entrepreneurs who’ve pitched those VCs.

Should you pitch VCs that have higher ratings? No. Their rating is irrelevant, and some of the VCs that have the best track record at picking, building and selling companies also have the worst reputations on the site. Whether reviews come in positive or negative, they aren’t worth much. Rejected entrepreneurs always want to blame someone for their failure – one place to turn that anger is TheFunded. Funded entrepreneurs want to get points by saying how great a VC is – and they, too, turn to TheFunded. At the end of the day, TheFunded is a great read, but the reviews are worthless and conflicted.

Do you really care if a venture capitalist shows up to your meeting ten minutes late or forgets to offer you a beverage? If a VC goes out of his or her way to be nice to you, is that really a reason to take money from them?

Think of it this way. If a VC stops a meeting early and says they’ll get back to you (that means “no thanks, we’re passing”), they’re doing both of you a favor. A deal isn’t going to happen. It’s far better to turn your attention to the next door down on Sand Hill Road than go moaning about it on TheFunded.

Focus on your business, and if you are lucky enough to have your choice of VCs when raising funding, take the best terms from the best branded VC you can get, even if you don’t get a latte when you drop by their office. Your goal should be to build a successful company, not have your ego stroked.

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

The Next Web conference that I am moderating 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).

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.

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.

Mark this one down as a major PR stunt, but they certainly have our attention: The founder (or more likely, founders) of venture capital gossip site TheFunded, who have been keeping their names anonymous since March when the site launched, will spill the beans tonight and announce themselves.

Staying anonymous was probably smart, since more than a few VC’s have been miffed at all the negative feedback they’ve received from startups who’ve pitched them.

But tonight the group says they’ll be announcing themselves at an event at Stanford. The exact time of the announcement? 6:45 pm.

Clearly Jason Calacanis and Philip Kaplan are either part of it or know who is. Both are now at Stanford, and neither will take my calls.

Both Calacanis and Kaplan are currently at Sequoia-backed startups, by the way. Calacanis at Mahalo, Kapan at Adbrite.

As it’s announced, we’ll update.

Update: The man, “Ted”, behind “The Funded” is Adeo Ressi. Ressi founded and sold casual gaming site Game Trust to RealNetworks this September for around $20 million. He also serves on the board of the X Prize Foundation, best known by their cash prize for civilian space exploration. He was apparently screwed by a number of VCs in the past, which gave him the idea for the site.

Update 2: Apparently Wired was pre-briefed, has a picture and lots of background.

I’m just going to touch on Wurkpal briefly. It’s a very simple forum site that is designed specifically for people to gossip/complain/etc. about their work environment anonymously. The site takes a guess as to where you are logging in from based on a reverse hostname lookup and tries to direct you to the correct company forum. You can also view the directory and go from there. The site badly needs a search function and the ability to add new companies.

We’ve covered a few companies that are roughly in this space – see BossBitching, Ovehear.us and JobVent. For entrepreneurs who want to rip into venture capitalists that have turned them down, TheFunded is always entertaining. None of these hold a candle to what FuckedCompany was back in the day, but it’ll take a major downturn before that type of site can see the glory days again.

Wurkpal is based in San Jose and says they’ve received angel funding.

TheFunded is now two months old and has turned into a somewhat controversial place for entrepreneurs to provide feedback on the venture capitalists they’ve pitched.

Until now, membership was restricted. You have to be invited by another member, and you have to prove your identity as an entrepreneur by linking to a bio page or other evidence.

There are some really ugly comments on the site. Funds that have been trashed include Foundation Capital (”hot receptionist only thing of value”), Motorola Ventures (”if this were a good idea, we’d be doing it already”) and ComVentures (”a few bright sparks in a high-school locker room of uber-jocks”).

At least a few venture capitalists don’t enjoy having their flaws exposed on the site. One VC, Howard Hartenbaum, became incensed after comments said he was “rude, arrogant, slow and vomit-inducing”. Matt Marshall wrote about the incident and said TheFunded was “turning out to be a useless site.”

Well, controversy sells. Hartenbaum reportedly started asking companies that pitched him to write their feedback about him on the site. Since the date of Marshall’s post, ten new comments have come in about him, all extra-positive. Prior to that there were just four comments, half positive and half negative (the two negative comments are to the left).

Now, TheFunded says they are letting VCs participate directly in the discussion. They can write an overview of the fund and it’s partners and give other information entrepreneurs might find useful. VCs interested in building out their profile should start here. The page offers to let you “set the record straight.”

It’s not clear if this will be enough to assuage the angriest VCs, who don’t like to see their behavior reported to the world. But that may not matter for TheFunded. The more content that appears on the site the better, and if it’s controversial that will create even more attention for the young startup.

Some venture capitalists are known for making speedy decisions, communicating clearly, treating portfolio companies fairly, and guiding their startups to a win for all stakeholders.

Others, not so much. Some even lob the odd (friendly) jab or two at bloggers.

A new site called TheFunded hopes to even the odds a little by getting the information out about how VCs treat entrepreneurs. They have a good database of venture firms (6,559 contacts from 3,529 funds), and invite members to rate and review funds after dealing with them first hand.

Others can agree or disagree with these comments, and/or leave their own. The end result is a list of happy and horror stories, as well as an overall 1-5 rating for each fund, on five different categories.

There isn’t much feedback yet, as the site is still under the radar with just 39 members. An example of feedback – Menlo Ventures has an overall rating of 2.8/5. There are two comments, one positive and one negative (the positive comment came from someone who was turned down).

You have to apply to be a member, which allows you to leave your own reviews and ratings, and read much of the feedback (only some reviews are made public). In the future they will only allow people who’ve been invited by other members. They also go to some length to make you prove who you say you are. VCs are not allowed in as members, and applicants have to say what company they are with and point to a bio page about themselves.

While I think this is a great service, I have a couple of problems with TheFunded.

First, since most startups are turned down for funding, there will be a tendency for people to leave negative comments, and readers need to take that into account. How well a fund treats the many entrepreneurs they turn away, of course, matters too, and that feedback is valuable. I think a good addition to the feedback form is a simple box to check if you were funded or rejected to help give readers context. Also, the face that this is a bit of a private club, and non-anonymous, should help mitigate many of the issues we mentioned with another feedback site, Gorb.

A bigger problem I have with TheFunded is that they distribute contact information about VCs, including email addresses and telephone numbers. This brings back memories of the repugnant, privacy-destroying Jigsaw, and it should be removed or at least made available only to members.

In this funding environment, where money is flowing, good ideas often have a number of venture capitalists to choose from. For entrepreneurs, this can be one of many data sources in determining who to accept funding from.