Why VCs don’t trust you

Hucksters

Photo by Shazz Mack

I'm a trusting person at heart. That's meant I've had to work hard on the second part of 'trust but verify' to make sure I don't get ripped off. It's also made me (possibly too) sensitive to anything that seems like sharp practice. I ripped into Rick Segal when he joked about a trick question he'd throw at entrepreneurs. I'd overreacted, apologized, and noted that VCs have a tough job dealing with hundreds of people a year wanting money and figuring out who's genuine.

It didn't sink in quite how tough until I saw Rick's last post. He received an unsolicited email with a deck attached. The email was an obvious spammed form letter, but what was really mind-blowing was the extra slides at the end of the powerpoint presentation. Clearly intended to be used only for live talks, they were entirely different versions of the business plan for different audiences, with completely different facts about the team, market sizes and objectives. Dealing with a constant barrage of similar folks queuing up to deceive you would be enough to make Gandi turn cynical.

I often feel like a country cousin when I wander around the Valley, not really understanding how the game should be played. There was a Gaping Void I can't find that had a VC and founder; "What's your business model?" – "You are, rich boy". I like money as much as the next guy, but a startup seems a really hard route to riches unless you're strangely obsessed with building a company. If there's one silver lining to the current funding crunch, I'm hoping it will at least cut down the number of hucksters like these sucking up the investment oxygen.

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