Thanks to Bill Reichert, Managing Director of Garage Technology Ventures, for this one:
Our projections are conservative.
Our target market is $56 billion.
We have a world class team.
Our average sales cycle is 90 days.
We have no direct competitor.
No one else can do what we do.
All we need is 2% of the market.
We'll be cash positive in 12 months.
Our contract with [Big Company] will be signed in two weeks.
I'll be happy to hand over the reins to a new CEO.
They might be 'extending the truth' but without having these 'striving for success' attitudes to a certain extent is the company worth investing in at all ?
Which is more frightening?
1) The companies that say this knowing full well that they are lying.
2) The companies that say this believing that they are telling the truth?
In which company would you rather invest your money?
How about the Top Ten Porkies VCs Tell Entrepreneurs?
Unfortunately the VC's bring this on them selves by not being prepared to invest in any one who gives reasonable and sensible projections, because these look bad in comparison to the people who are either lying or delusional.
Is the real problem unrealistic expectations from investors and the stock market in general? Is this possibly what has made such a mess of the banking industry?
Absolutely, Dave, they start talking bollox to snare a sucker - that's as old as the hills, but then they start belieivng eachother's bollox and finally they start beleiving their own bollox - and then disaster strikes.
Indeed, David, that would be interesting. Fancy making some suggestions?
David, my 10 suggestions are as follows:
Top Ten Porkies that VCs tell entrepreneurs
1) We are specialists in your field.
2) We won't ask for an unreasonable percentage of profits.
3) We won't interfere in the day-to-day running of your company.
4) We won't insist on you employing X in position Y.
5) Our funding is guaranteed for X years.
6) You can always get more funding from us.
7) We'll always give you plenty of time to sort out alternative funding.
8) We won't impose an unreasonable contract.
9) We have your interests at heart.
10) We have your company's interests at heart.
Finally; implied, but unspoken:
11) We're Venture Capitalists, not Vulture Capitalists.
I think most VC's are engaged in legalised fraud so I'm not sure Bill Reichert's opinion is worth much. It would be interesting to compare the exagerated projections given to VC's at initial pitch against those projections VC's then pitch to the market when looking for an exit 3-5 years down the track.
Superb, David, may I use them in a separate post on the site? I'm sure they would bring in some interesting comments