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Venture Capital: The lies people tell

Got this from a presentation by David Murray of Cape Venture Partners, a Venture Capital fund which has invested in quite a few successful businesses. Was alerted by a comment about 10 seconds after I posted this (literally) that it was originally adapted from Guy Kawasaki, here and here. So duly credited.

Top ten lies entrepreneurs tell
1. “Our market is $X billion”
2. “We won’t need a second round of financing”
3. “A large contract with BigCo is signing next week”
4. “If we sell less than 50% of the company we still have control”
5. “All our estimates are very conservative”
6. “We don’t have any competition”
7. “No one else can do what we’re doing”
8. “[Big Company] is too slow to be a threat”
9. “Our technology will become the industry standard”
10. “We only need 1.5% of the market to become a billion dollar company”

Top ten lies VCs tell
1. I liked your company, but my partners didn’t”. (That’s a NO)
2. “If you get a lead, we will follow” (NO)
3. “Show us some traction, and we’ll invest”(NO)
4. “We love to co-invest with other VC’s”(No we don’t, we want it all if it’s good)
5. “We’re investing in your team” (But don’t cock it up!)
6. I have lots of bandwidth to dedicate to your company” (and the other 10 too)
7. “This is a vanilla term sheet” (but even a lawyer can’t understand it)
8. “We can open up doors for you at our client companies” (they actually hate him)
9. “We like early-stage investing” (but prove yourself first)
10. “There’s plenty of money out there” (but not for you

Author Bio

Matthew Buckland
Matthew Buckland is an internet entrepreneur and investor with more than 20 years’ experience working in management and strategic roles for internet and technology businesses. He founded the digital marketing and strategy agency Creative Spark which he sold, five years after he founded it, to UK-listed firm M&C Saatchi.... More

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