TheFunded Plays Matchmaker

TheFunded today introduced a new service that allows its members to post business plans, in order to (A) Get feedback from other members, and (B) Get referred by other members to potential funding sources. Company founder – and sole employee – Adeo Ressi refers to it as his stool’s third leg, which already had included subjective/anonymous opinions on specific VCs, and a section devoted to prevailing deal terms.

Now there are lots of entrepreneur-investor matching services out there, and most of them have a winning percentage that rivals Yankees “phenom” Phil Hughes. The reason this one should do better, Ressi argues, is that VCs will be receiving pitches from their own portfolio company CEOs (i.e., TheFunded members). “A venture capitalist is always going to read a portfolio company CEO’s email. That doesn’t mean you’re necessarily going to get funded, but it does give you a good shot at an introduction, which is very difficult for a lot of entrepreneurs to get.”

The service opened in a sort of beta last week, and already has secured a small handful of introductions. Ressi is personally “publishing” a select group of plans for the first few weeks, until he can develop a reasonable set of automated metrics. Skeptics are already abounding – Matt Marshall among them – and I’d agree that there are two legitimate concerns:

  • Spam. Entrepreneurs can identify up to 30 firms they’d like introductions to, and I’d imagine that almost all of them will include top-tier firms like Sequoia (Ressi says this won’t happen – I respectfully disagree).
  • Reputational damage: It’s hard to position yourself as a “hot” startup at the same time that you’re putting out an elevator pitch for public consumption. I had a similar concern with, and it remains.

That said, this is a savvy move by TheFunded – which is fast becoming a free info clearinghouse for entrepreneurs in need of capital. Build the pageviews, which leads to increased advertising and ultimately an exit to some media company that values an engaged group of entrepreneurial readers (Dow Jones, Forbes, Thomson Reuters, TechCrunch, etc.).

As for whether or not it will actually help entrepreneurs attract institutional funding, I’m not sure. VCs don’t lack for deal-flow, and a lot of egos shy away from investing in a company “everyone” already knows about. On the other hand, the system may inadvertently create a virtual angel network — with TheFunded members investing in one another. So long as the money’s green…