A new venture is promising to rebalance the world of venture capital towards entrepreneurs by enabling them to find, rate and review funders from around the world.
Bound, which launches today, enables founders to slash the process of researching and selecting a VC partner from months to hours by combining the world’s most comprehensive free, searchable database of venture capital (VC) firms with the biggest library of verified reviews from founders themselves.
The company’s mission is to connect founders with VCs that can contribute real knowledge and expertise to their startup, shift the balance of power back towards entrepreneurs, and bring much-needed transparency to the VC market. With two in five startups failing due to fundraising failures, Bound plays a crucial role in helping entrepreneurs find the investment that will turn their startup dream into reality. Bound also celebrates and spotlights the best venture capital firms in the market, while enabling them to find founders who are the perfect fit for their funds and ensuring they deliver better returns for their investors for lower fees.
The VC market is in urgent need of reform. Research by Forward Partners last year found that while 92 per cent of investors believe they add value, two thirds of founders gave their investors a low value-add rating and said they failed to support their startup beyond providing funds. Moreover, many VC firms are often coming up short for their own investors, with less than a third generating ROI over 1.3x and less than one in five providing x2 or more returns. This is reflected in an analysis of the 6,000 VC reviews that Bound has gathered before launch, which found that 14 % of founders gave only 1 or 2 stars (out of 5) to their VC.
Bound is the brainchild of Pavel Síma, and was inspired by his experience of navigating the VC world when he was founding the marketing technology firm Roivenue.
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“Entrepreneurs are at a huge disadvantage when trying to find a VC partner, and this imbalance is hurting both founders and investors,” said Šíma. “Right now, VC firms hold all the cards – and that leads to bad relationships, bad deals, and failed startups. They have more of everything: more money, experience, lawyers and, most importantly, more time. Founders, especially first-time entrepreneurs, have none of these; they don’t know how to go looking for investors, let alone how to find ones that will support their startup and take them to IPO. It’s a process that takes months, at a time when they have a thousand other urgent priorities.
“Investment is supposed to be a partnership of mutual profit, but the power imbalance means too many startups go to the wall, crushing entrepreneurs’ dreams and discouraging them from founding another business in the future. Obviously, this leaves investors out of pocket, too. That’s why we’ve launched Bound: to enable founders to connect with the right VC on terms of true equality. By submitting detailed reviews of VC firms, mapped against more than 16 different categories – including experience and expertise, clarity of investment process, due diligence, speed, and professionalism – we are bringing much-needed transparency to these all-important relationships, while enabling VCs to get more relevant approaches from founders that better fit their investment thesis.
As well as detailed reviews, founders can also leave simple, public ‘star’ ratings, so other founders can get an at-a-glance view of potential funders, or dive deeper to discover which ones have the knowledge and experience that can take their business to the next level. Bound will also spotlight the best-reviewed VCs, helping to set new standards for best practice within the industry.
Before Bound, the only way for founders to learn about VC firms was with a Crunchbase Pro account, or to use the free version and perform the detailed and time-consuming analysis themselves. If they wanted reviews and testimonials, they would then have to use a second or even third platform just to build their long list.
Bound is the world’s only platform that combines detailed VC data with reviews. The platform is launching with more than 6,000 reviews and a huge database of VC firms that challenges Crunchbase; what’s more, Bound is making these free for founders for the first year from launch.
“First-time founders quickly learn that raising money is the easy part,” continued Síma. “Selecting the wrong investor is not just a huge waste of time and effort, it can actively hurt your chance of success. But when you have incredibly rich data, with all the different VC signals in one place, and combine it with user reviews, we are rebalancing the market towards founders, making them more likely to succeed in the long run. This in turn is great news for the VCs and their investors and shareholders. Bound is all about empowering entrepreneurs; by matching them with the right VC, we are creating a better community that will benefit both founders and investors and help to turn more dreams into thriving businesses.”