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Lies Entrepreneurs Tell While Raising Capital

Pitching to raise capital involves walking a difficult tight-rope between being too humble and small and being bombastic in attempt to seem bigger than you are.  Difficult, because there are a few common techniques used by CEOs to portray success that walk along the edge of dishonesty.

Here are five common examples of credibility-sapping statements made by foolish founders.

  1. My Customers – I remember a CEO who, during his pitch, kept referring to his customer-base of over 100,000 customers. Sorry folks, but a pre-revenue company doesn’t have customers. Customers pay money. Companies with customers are post-revenue. Pre-revenue companies have users. Users try out a company’s product without paying.
  2. My Team – Constantly referring to “my Team” and “we” when the company is a “team” and a “we” of one.
  3. To Tell The Truth – Never ever ever say “to tell the truth” while pitching for money, proposing marriage, or telling the truth.  Be honest, forthright, and believable, and you won’t need to utter the term that infers anything said prior was less than the truth.
  4. We Don’t Have Any Competitors – The most totally disruptive inventions of all time had competitors. The wheel competed against walking, riding horses, and the Native American travois. Radio competed with theatre, television with radio. If you don’t have any competitors, you’re either a liar or stupid.  Investors don’t invest in liars, stupid people, or stupid liars.
  5. Our Products Sell Themselves – “We’re going to go viral” or “Tech Cocktail will write an article about us and we’ll instantly capture 5% of the market thanks to the exposure.”  Products that sell themselves are like companies that fund themselves.  Selling takes knocking on real doors or having a solid plan and understanding the costs, motivations, and methods of customer acquisition. If you think your product is so good that it will sell itself, send if off to raise money for you too!
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About the Author'

Glen Hellman (@glehel), is an angel investor, serial entrepreneur, and works for venture capitalists as a turn-around specialist. He is the Chief Entrepreneureator at Driven Forward LLC, frequently muses on his blog, Forward Thinking, and works with entrepreneurs to help them figure out what to do and get them to do it.


10 Responses to “Lies Entrepreneurs Tell While Raising Capital”



    In my experience this is a two-way street. Many investors also "want" to be told a perfect story, with beautifully sloping hockey stick graphs and wonderfully simple yet scaleable unit economics – "rinse and repeat". In reality no startup is as de-risked as they want it to be. If it was, the founders likely wouldn't be seeking venture capital. But if an entrepreneur lays out all the warts up front they lose, because there are only too many other entrepreneurs competing for capital who are willing to frame the story the way the investor likes it.



      Ben, absolutely a two way street. If there's no hockey stick, there's probably no deal. Yet you nailed another important detail. An entrepreneur who under questioning, demonstrates an understanding of the unit economics and inherent risk of hiring plans (50% hiring success rate, slow hires, replacing bad hires and the opportunity and financial costs associated) can back up the boast.

      Thx for the response.



    TechCocktail did write about us and we did capture 5% of the market…(I'm not going to tell you how we defined market). Great article!

  3. @gisanders

    Happy to report never told any of these lies to an investor. We are post revenue, with customers, a solid team, and competition.



      Good to here GI. I guess that means you've never said the check's in the mail when it wasn't in the mail yet, too.

      Good for you.

  4. @venturementors

    Glenn, I always enjoy your posts so thought I would stop lurking and post a comment & a request.

    In a future post can you share the OPPOSITE of this set of "foolish founders" claims? What five things would the "impressive founder" say?

    Borrowing from your format, and to give you an idea of what I'm talking about, here are my nominees for five "credibility-building statements by impressive founders":

    1) since we spoke a week ago, we have signed up this truly awesome set of x new customers
    2) tested the product in a new market segment with stellar results
    3) experimented with a new customer acquisition channel that shows promise
    4) figured out our average revenue per user for current offering and have some new ideas for boosting lifetime value of our customers
    5) got some customers to share their experience in the press and a nice writeup from Walt Mossberg in WSJ.

    Would you agree that startup founders that are executing well don't HAVE to tell lies while raising capital?

    Someday I would enjoy reading (or hearing) your five nominations for statements that add greatly to the fundraising founder's credibility.



      Hi John, agree that would be great if I could only do that. Funny thing about me, I get fired up by something, feel like ranting and the words spew forth. It's a rant on a page. I see so many great entrepreneurs doing things well and they put me in a peaceful state a I watch in awe. The best are hypnotizing, calming and for me they make terrible muses.

      I could never write for money because I have total writers block when given an assignment to write on anything that doesn't evoke a strong emotion. The infuriating stuff inspires my need to unload and vent in writing. That's what makes me, Mr. Cranky.

      So, let me think about that and see if I can get psyched. Also, based on what I know about you and your experiences, you are well qualified to write that article. Would you be interested in writing it for publication in here?

      When we going to sit down for a cup of coffee?

      Other folks need to check out John's blog at


    • @TCHMueller

      Good article and comments. I have two questions:

      First, would investors want to hear about the little failures and pivots that got the startup to where it is today? Great ideas rarely arrive in a finished form ready for mass consumption and monetization. I'd rather hear about a good idea that has been nurtured and modified over the past 12 months than a great one that is only two months old.

      Second, would investors want access to real-time metrics on the company? I'm considering building a startup dashboard – I have my metrics and goals, so why not publish them for my teammates and investors?

      I'd appreciate your thoughts. Thank you.




        The winding road is that brought you to this place adds value during due diligence. Once you've captured a potential investors attention.

        Metrics are always good for the investor and good for the investee when they point in the right direction.


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