The Art of the Start/Kawasaki 124 - 128

128 Top Ten lies that entrepreneurs tell investors

1) Our projection is conservative

2) Gartner (Forester, Jupiter, or Yankee Group) says our market will be $50 Billion in five years. [prove market size. Don’t cite these numbers and expect to impress investors.

3) Boeing is signing our contract next week.

4) Key employees will join us as soon as we get funded. [If you’re going to tell this lie, make sure that these potential employees are locked and loaded and ready to quit.]

5) Several investors are already in due diligence.

6) Proctor & Gamble is too old, big, dumb, and slow to be a threat.

7) Patents make our business defensible. [When talking to investors, the optimal number of times to mention that your technology is patentable is one. Zero is bad because it implies you don’t have anything proprietary. More than one mention means that you’re inexperience and think patents make your business defensible.

8) All we have to do is get 1 percent of the market. […come up with at believable total addressable make figure or catalyze fantasy so the investors can come up with a number himself.

9) We have first-mover advantage

10) We have a world-class, proven team.