todaytest 04/22/2007

Paul Kedrosky: Updated: Top Ten VC Lies  Annotated

pdated: Top Ten VC Lies

From a recent (highly playful) presentation of mine, here is my list of the top ten lies venture capitalists tell. Imagine it being read in reverse order, from 10 to 1, a la Letterman:

10. We’re all on the same side here.
9. A lower Series A valuation is good for you too.
8. We’re not funding XXXX companies anymore.
7. I liked it. Really. But we just don’t have the bandwidth right now.
6. We don’t do deals we can’t drive to.
5. Come back when you have a lead investor.
4. Absolutely, we know top people at Google and Yahoo well.
3. Absolutely, we know people at Sequoia and KP well.
2. We love your CEO.
1. I liked it, but I couldn’t get it past my asshole partners.

[Update] A few people has asked for a little more context on some of the above. Most of them are self-explanatory, but I'll add to a couple.

10 -- It is a stretch to say you're all on the same side. Granted, if things are great then you all get wildly rich, but VCs can make some money on deals that make founders nothing.

8 -- VCs often use this one as a crutch, even if the reality is they never say never to anything.

6 -- One of the biggest lies out there. There are virtually no VCs so geographically specific anymore, but that doesn't stop people from using this as an excuse. As I told Brad yesterday, I recently had a Sand Hill VC say the preceding about an East Bay deal. Guess they don't like bridges.

5 -- We never say what we'll do when you do come back.

2 -- This is a fave, and is usually followed by firing the CEO post-close.

1 -- An all-time fave. It lets you say no, blame someone else, and still come across as a great guy. A complete lie nine times out of ten.

[Update 2] I wasn't going to dignify it by a post, and I'm not going to link to it, but a certain gossip site on the web has made a false and highly offensive allegation about the origins of this post. I'm open to ideas what to do about it, because courting controversy is one thing, but making this sort of false allegation in public is something else. Ideas anyone?