Square Peg has omitted anonymous feedback during its reviews, with co-founder Paul Bassat saying it creates an “all care and no responsibility” mindset.

Bassat increased LinkedIn to post about the company’s revised review processa few days before a new ranking of Australian and New Zealand VCs based on anonymous feedback from founders who had received VC funding, Square left Peg out of the top 10.

While Blackbird was on top “founder friendly” VC rankingsSquare Peg came in at 11, with the country’s other major fund, Airtree, at 25.

The list ranked the top 25 VCs out of 150, based on feedback from over 700 founders, left anonymous.

Behind Blackbird, EVP, OIF, Gen X newcomer Afterwork and New Zealand fund Global have been the top 5 from day one. The list is already a controversial talking point in the startup and investment sectors, with many high-profile funds failing to make it. fetch, amid a tentative welcome from some VCs about their inclusion, praised the “transparency” the VC leaderboard provides.

Astral Ventures co-founders Joe Patrick and Albert Patajo created the list in an effort to be “a source of truth that showcases the best VCs in the eyes of founders” and to focus on the “rumours and rumors” that founders hear about VCs.

An Elo-based algorithm was used to rank the funds in a way that they believe removes bias towards larger, more active VCs.

Before it appeared, Bassat outlined how the VC had adapted its review process he explained what the new semi-annual review was like, saying that the feedback he personally received was “as good as any” he had received in his career.

“The transparency, usefulness and thoughtfulness of the entire team’s feedback to our colleagues was of much higher quality than in previous reviews and this is incredibly helpful,” wrote Bassat.

He then outlined “why we’ve done better this half” by identifying two key areas that could be seen as contradicting the underlying principles behind the Astral VC ranking.

Square Peg removed anonymity from its ratings, as well as a rating scale, in favor of text-based responses.

Bassat said this provided “some incredibly interesting lessons,” including countering the notion that being anonymous leads to more truthful answers.

“There is an argument that anonymity encourages openness and allows people to provide more honest feedback, but we have learned that the opposite is true,” he wrote.

“Anonymity can create an ‘all care and no responsibility’ mindset. On the other hand, in an organization where colleagues really care about each other, direct (non-anonymous) feedback requires the person giving the feedback to be thoughtful and transparent.”

No reviews

Omitting a review allowed them to focus instead on what was being said.

“The problem with a rating scale is that it can lead to a combination of herd behavior and grade inflation and removing this noise from the process seems to have been really positive,” Bassat wrote.

“Without a rating scale, the focus shifts from the ratings to the specific content of the feedback.”

The other change Square Peg made to its review process was to ask “fewer questions and better questions”.

Identifying the right handful of questions and having the discipline to ignore others “requires real thoughtfulness,” Bassat said.

“Perhaps the biggest lesson of my career (and one that applies to any kind of process) is that asking the right question is the single most important driver of success,” he said.

You can read his full post here.