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Clearing the jungle.

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An entrepreneur has turned the tables on venture capitalists by creating TheFunded, an online community where heads of start-ups expose devils and saviours in the world of moneyed investors.A Adeo Ressi founded the unprecedented online forum in March last year to show entrepreneurs how to swim among financial sharks and not be devoured.

He is so wary of powerful venture capitalists that he remained anonymous until last month. A"The entrepreneur basically walks into a wolf's den as a lamb,A" Ressi said. A"We are going to change that.A"A TheFunded lets start-up chief executives rate venture capitalists and share stories of dealings with them.

The web site reveals complaints of venture capitalists being arrogant, duplicitous, and even possibly stealing ideas. There are stories of investors changing terms in final moments or ousting founders in order to sell firms for fast profits. A"I think TheFunded is a good source of anecdotal data that helps inexperienced entrepreneurs learn a little bit about how the Silicon Valley works,A" said Drew Lanza, general partner at Morgenthaler Ventures. A"But I would caution that the plural of anecdote is not data, and young entrepreneurs should take what they read on the site with a pinch of salt.A"

Ressi vets each member to make certain they head companies and then erases identifying information so they are anonymous on the web site. TheFunded boasts nearly 6,000 chief executives from around the world. It can be a A"healthy and constructiveA" resource, as long as people consider that entrepreneurs can react emotionally to rejection, said Allegis Capital founder Bob Ackerman, a former entrepreneur.

A"Entrepreneurs' companies are their babies,A" said Ackerman, a spokesman for the National Venture Capital Association.A"When you tell someone their baby is ugly, it gets personal.A" Weeks ago, TheFunded added an arena for posting financial details of venture capital deals. The forum reveals terms A"all over the mapA", according to Ressi.

This month TheFunded will begin letting entrepreneurs pitch ideas to chief executives that have funding. Financed executives can then recommend worthy pitches to their investors. A"TheFunded, at the end of the day, gives anyone with a vision the ability to bring it to market,A" Ressi said. Ressi is a hero in the eyes of entrepreneurs such as Tom Faust, who is struggling to raise funding for his Redwood Renewables start-up that makes solar-power generating roof tiles.

A"You see patterns in how venture capitalists respond like old dogs that don't learn new tricks,A" Faust said. Human Global Media founder Brady Brim-DeForest, who is on his fourth start-up, credits TheFunded with shining light on how venture capitalists do business.A A"They are now more accountable for how they do business,A" Brim-DeForest said. A"We've created a sense of community and levelled the playing field a little bit.A"

Venture capitalists complain that anonymous comments lack authority and that they can't post responses on the web site. A"It is really just a group vent,A" said Storm Ventures managing member Sanjay Subhedar. A"It gives a one-sided view and there is no chance to rebut.A"

Subhedar defends the venture capitalist community, saying there are natural checks and balances in place to keep deals fair. He sees TheFunded as a useful platform for A"newbie or noviceA" entrepreneurs. Lanza said he favours illuminating how Silicon Valley operates but has reservations about a culture rewarding unbridled anonymous attacks on individuals among venture capitalists.

[c] 2007 Al Sidra Media LLC

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Publication:7 Days (Dubai, United Arab Emirates)
Date:Feb 18, 2008
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