Intentional Misdirecton
April 24th, 2008 categories: Venture Capital
Let me guess…you can’t sleep at night.
You’ve been up for days thinking about your new idea, or perhaps the latest rendition of it. You have it all thought out: staffing, management, equipment, space requirements, growth rate, sales and marketing, etc.
You’re certain to recruit great talent, and why not? —with an endless supply of superior malcontents within your sector – you might as well be plucking day laborers from the back of an INS truck. They’ll gladly serve as Generals in your army. You’ll be a fearless leader and command battalions of troops (lured by options of course), to join your disruptive Jihad against oppressive corporate America. You’ll free yourself from the shackles of mediocrity and the bondage imposed upon you by the “9-5 Axis of Evil.” All you need now is a little financial support – a brigade of friends, family and fools, peppered with a few Angel Investors, here and there. One hard pull on the bootstraps and it’s off to the Series A Round—here comes the private placement for widows, dentist’s wives and idiot’s sons.
Following that successful round up, who’d ever question your plans for an institutional play? Maybe 20% for $1M and some convertible debt. Venture Capital is abundant and there’s billions of it out there. Just Google the word “Ventures” and take your pick. Better yet, why not join a few preferred investor networks – bringing the red light district right into the privacy of your own home.
Flash forward, you’re nearing the three year mark (in your head). Why not position yourself for a successful merger, acquisition or IPO? (they’re quite abundant these days). Why not go OTC? Your buddy knows a guy who knows a guy, that does these “reverse mergers” into public shells. It’s not that expensive, and a great way to churn your own volume – Next stop: Nasdaq.
Now, let’s for a moment presume that you’re not the typical midnight dreamer (as described above), high as a kite on your own blend of ether and idiocy, where the order of the day is to not walk you back to your cubicle, in favor of shock treatment for your “entrepreneurial seizure” – what now…?
Truth:
The quest for entrepreneurial freedom is now more en vogue than ever before, beginning with deconstructing college students – to get off the pipe of corporate hype, and ending with late bloomers (baby boomers) and old timers – three distinct groups who are now aware that they are either unemployable or obsolete. Either way, regardless of how you arrived at your destination, the ice water is pretty frigid.
Someone once told me:
“You’ve got a better chance of getting hit by lightning in a swimming pool, than you’ll ever have getting a venture capitalist to return your phone call.”
- But gaining access to venture capital isn’t the meat of my message, quite the contrary – so don’t focus purely on the term “Venture Capital,” but rather on the intrinsic meaning of the words “Venture” and “Capital” independently.
Joining these terms suggest that someone, or a group of someone’s, somewhere, are intent on, or at least interested in, venturing a commodity called Capital, into something you believe in. It also implies that a venture gained is not capital lost, so you’d better believe “they” want a return. That’s right, a return, and a big one at that.
My point here is that everyone is a venture capitalist—it’s just a question of scale and whether or not you espouse to be a professional. If you make a bad deal with a friend or family member, realizing later that you gave away too much of your company, you essentially beat yourself at a pro’s game, which makes you an amateur.
The only difference being, you probably sealed your fate and don’t yet know it. Join the club, you’re not alone. You’re now a proud card carrying member of the “would be” society – wearing the scarlet number 98, representing the percentage of businesses that will never gain official access to the capital markets – and not just because you botched the value of your company by bringing in Uncle Herman for 30%, but for a multitude of factors, which include, among many others, pure lack of experience mixed with intentional misdirection.
Yes, you heard it right…Intentional Misdirection.
We the people…wait, wrong charter. We the Vultures (Venture Capitalists, Angel Investors and Commercial Banks), of the United Financial Oligopoly (“UFO”), do solemnly swear to hide the truth, the whole truth, and nothing but the truth, so help us God.
How do I know this? – because I’m one of them, and have been now for the last fifteen years!
Behind the cloak of the XVulture, I’ve amassed considerable wealth, trading on the scalps of inexperienced and unsuspecting dreamers like you. My cohorts and I happily cherry picked the best of breed from almost every industry, luring bushy tailed entrepreneurs into our clutches, on the promise of capitalizing their life’s ambition.
What we didn’t disclose, however, was the reality of our chosen path for them – a road paved with landlines, not gold. Each and every one of them (even the ones that did deliver), would soon learn the art of Intentional Misdirection—a calculated setup born from our (self proclaimed) elitist greed, and a viewpoint that entrepreneurs are nothing more than accidents waiting for capital. Regardless of how the deals started, they always ended the same way—our way. We owned, controlled, and fired at will – leaving the founders for dead, only to pass on our secret recipe for Vulture Stew (1/5/0):
One year, less than a five percent stake, and zero involvement.
So who am I and why am I telling you this? The second part is easier to answer—because life has a way of teaching us things in reverse. Sometimes we have to fast forward to the end in order to to make sense of our beginnings. So if you happen to be one of the rare few that ever get glimpse of who you might have been, change.
As to the first part of the question, I’m the XVulture for now. And because I haven’t yet evolved to the point of giving all my blood money to charity, I have partners, investors, and numerous companies that would not appreciate my new found conscience or desire to help the underdog.
Maybe someday.
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Great article, scary and intriguing at once.
While ago,I would have no idea what it is about, but as the journey continues I am beginning to understand.
Like I say : ” Scary, intriguing and very exciting” I must say, once when you have at least a chance to look under the surface.
Looking forward your new posts …