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

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