In the glittering world of early-stage investing, where promises are as abundant as venture pitches, a peculiar language of little white lies often echoes between VCs and founders. It’s a dance of diplomacy and deception that both sides partake in, a cryptic code that requires a seasoned translator. Let’s peel back the layers of these lies and unveil the truths they cloak, offering a guide for beginners entering this labyrinthine realm.
VC Lies Unveiled:
1. “We’re interested in your company but it’s too early for us right now.”
Translation: We adore your charisma, but your business idea needs a life jacket. If you’re back for another round, it’s a hint that something worked, just not enough for us to dive in. Farewell, and good luck on your entrepreneurial quest.
2. “We’re focused on change and investing in only the smartest entrepreneurs.”
Translation: We stick to our inner circle and anyone who’s a graduate of the top programs. The revolution is secondary; friendships and pedigrees take precedence.
3. “We support founders from start to exit.”
Translation: We support founders until we decide it’s time to jump ship or until we find a shinier investment opportunity. The commitment lasts until it doesn’t.
Bonus: “We invest in diverse founders.”
Translation: Our investment team is a mirror image of each other, with diversity being a distant concept. Actions speak louder than words, and our team photos prove it.
Founder Lies Unraveled:
1. “We are co-founders who just simply love working together, we support each other’s strengths and weaknesses.”
Translation: One founder loves the limelight but can’t code, so they’ve claimed the CEO title. The other is a coding virtuoso — coding, they do it all.
2. “Our vision is to be the go-to in our industry within the next 10 years.”
Translation: The founders have a vision board, but it’s more wishful thinking than a strategic roadmap. Ambition is there, detailed plans, not so much.
3. “Our TAM is $1000TRN; all we need is 10% of that market, and you can only imagine the possibilities.”
Translation: The founders haven’t delved into market research; their TAM is a wild estimate fueled by blind optimism and a handful of supportive friends. The possibilities are vast, but the groundwork is shaky.
Bonus: “We are looking for a strategic partner to be our investor.”
Translation: We’re not picky; we just need someone with a chequebook. Desperation hides behind the facade of strategic partnership aspirations.
In this intricate dance of lies, the key is not to get lost in the misdirection. Both VCs and founders play their part in crafting a narrative that may stray from reality. It’s a world where transparency is a rare gem, and deciphering the truth requires a keen eye and a sense of humour. So, strap in, dear reader, as we embark on a journey through the twists and turns of the unspoken language of early-stage investing.