The Dawn of a New Morningstar?

Mike Alfred thinks Silicon Valley VCs are mostly clueless, and he plans to prove it with the help of some powerful financiers.

Alfred, 28, is co-founder and chief executive of San Diego-based Brightscope, a two-year-old company focused on giving people tools to compare their company’s 401(k) plan to that of other similar companies.

Brightscope — the brainchild of Dan Weeks, a longtime Hewlett-Packard executive turned Brightscope cofounder and COO — began its effort by using Department of Labor data to reconstruct and rate roughly 2,500 company-sponsored 401(k) plans according to 200 data inputs, including performance, plan cost, and hidden fees.

As more people have discovered the site, users have begun submitting their plan information directly. More, Brightscope is now working with a growing number of Fortune 100 companies like Lockheed Martin and McDonald’s, whose employees — and in many cases, the human resource managers who choose plans  — want more insight into how their retirement plans stack up.

“We’re helping companies limit their own risk, so they can figure out what they need, says Alfred. “Right now, there isn’t nearly enough transparency in the industry. We’re getting and delivering information that no one has ever offered before.”

Indeed, the company says that based on its own ratings algorithm, it can run thousands of simulations to determine how long employees need work in order to receive the same retirement savings that other plans offer.

For revenue, the company plans to sell its software analytics to the plan sponsors and, eventually, to financial advisors. “It’s like when Morningstar” — the Chicago-based investment research company whose five-star rating system can make or break a mutual fund company  — “started rating Fidelity’s mutual funds. Fidelity basically said, ‘if they’re going to do this to us arbitrarily, let’s open up our data to them. Now, Morningstar has information that no one else has” —  and annual revenues of more than $400 million to show for it.

So why the animus toward venture firms? Brightscope, which raised a $1 million Series A last year from individual investors, recently “got meetings through our counsel with a lot of VC firms. But we didn’t like what we saw or the type of relationship that was put in front of us,” says Alfred.

Specifically, he says, “VCs are only investing in models they’ve seen. You can have the perfect team and the perfect idea, but because you aren’t another YouTube, what you wind up hearing is, ‘Great idea, but I haven’t seen this model work, so I can’t invest.’”

That’s not to say Brightscope has run headlong into a wall. On the contrary, the firm recently nailed down a sizable Series B that will be disclosed in a couple of weeks. (We’ve been asked not to publish any figures or names in the interim.) Notably, its investors include one buyout pro, the chief technology officer of a $20 billion hedge fund, and a general partner at a venture capital firm.

How long the funding will last remains to be seen. Brightscope already employs 22 people, including 11 data analysts — half with fancy MBAs — who spend their days extracting the key data that enables Brightscope to figure out fees for plans. The database it has in mind won’t come cheap.

Whether the startup will be meeting with VCs again isn’t clear, either, though. To hear Alfred tell it, Brightscope may not have reason to. “The 401(k) space truly is one of the backwaters of the financial industry,” and investors –if not traditional venture funds — are opening their eyes to the opportunity to change all of that. “I do think we’re one of the rare financial startups that could raise money pretty easily in this environment,” he says.