Who's Behind The Funded?

It's hard to say what Web 2.0—that horrible, overwrought catchphrase—really means, but it usually has something to do with disruption, whether it's long distance telephony (Skype), concert tickets (StubHub), book publishing (Google), or newspapers (take your pick). Venture capitalists have been responsible for many of these breakthroughs, happily financing (and profiting from) technologies that have reshaped a host of industries.

Until the industry that's getting shaken up is their own. For the past few months, entrepreneurs have been turning the power of social media against their erstwhile backers, posting anonymous flames about VCs on TheFunded.com. The website, which is the subject of an article in our September issue (read it here), was created as an outlet for entrepreneurs to frankly discuss their experiences with VCs. While still in it's infancy, the site has attracted more than 1,500 members and was the subject of a story in today's Wall Street Journal.

Back in June, I began chatting with the site's founder, whose name I still don't know (read on for speculation). Ted, as he calls himself, told me that he hopes to upset the imbalance of power that has traditionally existed between VCs and entrepreneurs. In short, VCs have loads of information about the entrepreneurs they back (personal references, financial statements, etc.) while company founders must make their decision based on a pitch meeting and a website full of success stories. The same thinking motivated Naval Ravikant and Babak Nivi, the co-founders of another potentially disruptive site Venture Hacks.

Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin