???Guy Kawasaki?blog, ??????vc??????, ??? ?no? ??????...
http://blog.guykawasaki.com/2006/01/the_top_ten_lie.html
January 05, 2006
The Top Ten Lies of Venture Capitalists
Venture capitalists are simple people: we've either decided to invest, and we are convincing
ourselves that our gut is right (aka, ?due diligence?) or there's not a chance in hell. While
we may be simple, we're not necessarily forthcoming, so if you think it's hard to get a ?yes?
out of venture capitalist, you should try to get a conclusive ?no.?
This is because there's no upside to communicating a negative decision. Entrepreneurs will
simply hate us sooner--instead the game is to string along entrepreneurs in case something
miraculous happens to make them look better. (An example of a miracle would be Boeing approving
a $5 million purchase order.)
Alas, entrepreneurs are also simple people: If they don't hear a conclusive ?no,? they assume
the answer is yes. This is an example of the kind of breakdown of communication between venture
capitalists and entrepreneurs that causes much pain and frustration for entrepreneurs.
To foster greater understanding among the two groups, here is an exposé of the top ten lies
of venture capitalists.
1. ?I liked your company, but my partners didn't.? In other words, ?no.? What the sponsor
is trying to get the entrepreneur to believe is that he's the good guy, the smart guy, the
guy who gets it; the ?others? didn't, so don't blame him. This is a cop out; it's not the
other partners didn't like the deal as much as the sponsor wasn't a true believer. A true
believer would get it done.
2. ?If you get a lead, we will follow.? In other words, ?no.? As the old Japanese say,
?If your aunt had balls, she'd be your uncle.? Well, she doesn't have balls, so it doesn't
matter. The venture capitalist is saying, ? We don't really believe, but if you can get Sequoia
to lead, we'll jump on the pile.? In other words, once the entrepreneur doesn't need the
money, the venture capitalist would be happy to give him some more--this is like saying,
?Once you've stopped Larry Csonka cold, we'll help you tackle him.? What entrepreneurs want
to hear is, ?If you can't get a lead, we will.? That's a believer.
3. ?Show us some traction, and we'll invest.? In other words, ?no.? This lie translates
to ?I don't believe your story, but if you can prove it by achieving significant revenue,
then you might convince me. However, I don't want to tell you 'no' because I might be wrong
and by golly you may sign up a Fortune 500 customer and then I'd look like a total orifice.?
4. ?We love to co-invest with other venture capitalists.? Like the sun rising and Canadians
playing hockey, you can depend on the greed of venture capitalists. Greed in this business
translates to ?If this is a good deal, I want it all.? What entrepreneurs want to hear is,
?We want the whole round. We don't want any other investors.? Then it's the entrepreneur's
job
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