It’s always interesting to see VC reactions to TheFunded.com. A recent VC blog post warranted a response. For less than a day, Neuhaus Partners GmbH was rated as the #1 venture firm in the entire world. However, I happened to complete programming an algorithm that removed them from the “top dog” position on a plane ride back from Europe, so their industry leadership did not last long.
Obviously, a partner at the firm is upset and feels “wronged” by the loss of status. It might seem strange that you have not heard of this fund. As it turns out, a number of funds that you have not heard about are in top positions on TheFunded.com. The site helps small, good, and unrecognized funds gain exposure. The opportunity for exposure has lead to both positive and negative abuse, and the algorithm was designed to make the ratings accurate. Read on…
TheFunded.com released an algorithm to spot any unusual activity in the numerical rating (”rating”) and written review (”review”) systems. Approximately 15% of all firms on TheFunded.com have unique content characteristics that make them different from hundreds of other firms rated and reviewed by thousands of CEOs. These firms with suspicious content include top-rated and lower-rated organizations.
What are some examples of suspicious content? Imagine if over 75% of a firm’s rating and review content was supplied by CEOs that just logged on once to write something about only that firm. Imagine if a large portion of review content contained superlatives, like “best,” “greatest,” “worst,” “horrible,” and/or exclamation points. Imagine if numerous CEOs that reviewed the firm clicked a checkbox stating that the firm asked them to write the review.
TheFunded.com created a scoring system to evaluate the level of suspicious content, and, if a firm scored beyond a certain threshold, the firm was flagged with a warning message for approximately 45 days. After the warning period, no content was deleted, but suspicious numerical ratings were eliminated from the fund average rating. The result is a more accurate system.
How can you measure if the algorithm worked? TheFunded.com rating leaderboard was previously inaccurate according to the thousands of entrepreneurs that used the free service. This hurt CEOs looking for information, since small funds with a limited operating history and no track record were listed as the best funds in the entire world. For example, Fred Wilson of Union Square Ventures publicly stated that he did not deserve his place on the leaderboard. The corrections implemented by use of the algorithm have made the leaderboard much more accurate according to the broader Membership.
Adeo, I never said or wrote anything to you indicating that I felt “wronged” or “upset” by loss of status and I don’t believe my blogpost indicates this. What I felt was unfortunate is that people who took the time to post reviews of our fund, which in essence pushed us to the top spot for a short while, were discounted.
Otherwise, I’ve actually tried to be constructive, even praising the intent of TheFunded. “Status” as you are calling it on TheFunded is not earned by how large or well known your fund is but by the number of reviewers giving positive reviews while also falling into the “acceptable” category as determined by your algorithm.
Be careful that your main motivation isn’t to stick it to the man (in your case “VC”). Life’s too short! There are good VC’s out there who aren’t intent on screwing over entrepreneurs and there are some highly rated VC’s who will stick it to you if you don’t watch your back. Best of luck with the site!
While life is sometimes a struggle, and success harder than failure (or worse: complacency), it need not be war.
Oh, there IS an economic war out there, with guns and casualties, but this is NOT that place. Here & at the Funded there is a sincere effort under way to provide sincere peer review. These are positive efforts, which can be used as tools for the betterment of both reader & those reviewed.
Good algorithms, and adjustments along the way will ‘keep the honest honest’, and occasionally highlight ‘outlyers’. The Fortune 500 (and other groups) also had adjustments over history. Neither the Funded nor the more established reviewers would go for long without sincere efforts to keep even reviews, and make those minor adjustments along the way.
Keep up the good work, and here’s hoping that Neuhaus does well in the future too!
I think with just a little perseverence (and luck wouldn’t hurt either, but we all know that smart workers ‘make’their own luck), many ‘one-day wonders’ will come back for longer & longer days at the top of this chart and others.
Time will tell, but most of us reading here & at the Funded will bear witness that Adeo is in this for the long haul.