Financing and business development is going 2.0 or maybe a prosper.com is in development for start-ups. San-Fransisco-based company, TheFunded introduced today a new service that allows its members to post business plans on its website, which enables them to get feedback on their business plans from other members, as well as get referred by other members to potential financing sources. May I note that the members of TheFunded include founders, CEOs and executives of start-up companies and also venture capital, advisors, lawyers, etc. The website is free for business executives and founders but investors, advisors and lawyers have to pay a subscription fee. Prior to adding this service, TheFunded.com acted as a community where founders and entrepreneurs were able to rate and also share their experience in dealing with various venture capital funds and other financing sources.
In fairness, this is not a completely unique idea. There are a lot of entrepreneur-investor matching services, but TheFunded.com has some uniqueness in the way the CEOs and founders can contact investors and vice-versa.
During my career, I have dealt with companies seeking financing from institutional investors (i.e., venture capital, private equity, etc.) and I have mixed feelings about the success this kind of program may generate. On one side, it's about time that the stranglehold investment bankers/brokers hold in generating financing for companies loosens; but on the other hand, I am aware of the egos venture capital and private equity guys hold about generating "proprietary deal flow" (Wall Street gibberish for investing in companies that others are not aware of) and so I am not sure if they would warm up to an idea of investing in companies they come in contact with through a networking site, or in other words, investing in companies that the other venture capital guys are aware of.
Well time will tell....
Monday, June 16, 2008
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