You gotta forgive VCs for being a little cynical. After viewing some 10,000 pitches from startups, Garage.com's team has concluded:
"There are lies, damn lies, and business plans," according to Bill Reichert, president of the Silicon Valley company that matches angels and
startups. At a Pasadena (Calif.) forum sponsored by energy
technology company WestStart-CALSTART, he imparted Garage.com's list of the "worst entrepreneurial lies and myths" to 400 eager
entrepreneurs, investors, and lawyers.
Topping the list of lies:
"Our projections are conservative"
"Our contract with [big company X] will be signed next week"
"This is an [X]-billion-dollar market".
Businesspeople should "step on their tongues" before they allow themselves to utter any of the above, warns Reichert.
Turning to myths, he first smashed the happy notion that there's more money than good ideas, then dispatched two other articles of
received wisdom: Being first with an idea or having an impressive management team makes you a sure winner.
So what's the magic formula? "The most successful teams have an elegance about their idea, their vision, their model, their partnerships,
and their ability to articulate it," Reichert said. "And at the same time, they also possess a certain outrageousness in their attitude."
How do you get elegance and outrageousness into your business plan? Forget business plans. "No one's going to read them!" says Reichert.
Get introductions to VCs or distill your idea into sizzling, one-paragraph e-mails.
Is there hope for those who don't have those elusive qualities? Not really, according to Reichert. You've either got it or you don't.