Grading venture capitalists

Today's Wall Street Journal (Aug. 7) has an interesting story about the Web site thefunded.com that allows entrepreneurs to grade venture capitalists. Click here for the Wall Street Journal story. It is a subscription site, so hopefully the link will work.

In a nut shell, entrepreneurs must register and be approved to be members of the site. Then they can post comments. Once posted, however, the comments and scores are publicly available.

I made a quick run through the site and checked several of the equity groups that have been active in the government space. While Arlington Capital Partners, Veritas, CM Equity, Frontenac and Riordan Lewis & Haden are listed, no one has scored them yet.

One group active in the government market that I could find with a score was the Carlyle Group, which received a track record grade of 3.5 out of 4. Grades also are offered on a scale of 1 to 4 in areas such as operating competence, pitching efficiency, favorable deal terms and executive assistance.

And then there are the comments. I don't want to pick on Carlyle, but they took some hits. The most positive one said: "Big, slow moving, old school fund with deep pockets and strong influence in DC." Most of the others focused on not getting phone calls returned or making repeated pitches before finally being rejected.

Novak Biddle Venture Partners fared much better with in the comment department with most people praising the firm's toughness and the questions that were asked during meetings. One person said that Jack Biddle gave them a "beat down" but that it was a good learning experience.

Exploring the site got me thinking: If someone built something like this for the government market, what or who should be graded? Agencies? Prime contractors? Would you use it?