Blurred Lies: More Lies That VCs Tell (Part 2/3)
Last week we established some of the key reasons that VC lie, and talked about some of the basic, and mostly beneficial lies that we tell. Today, we’re going to discuss lies that are in more of a grey area. The lies that don’t harm someone per se, but that most assuredly don’t help either. And, they most certainly help the VCs that tell them.
We’re going to start off easy with the lies VCs tell for popularity, or in other words, posturing.
For the simplicity of this article we’re going to define posturing as contorting the truth about one’s self or relationships to appear more likeable. One common way VCs do this is on calls with other VCs: people attempt (apologies because there really isn’t a better term) to compete in a dick measuring contest, creating transactional relationships by trying to appear more experienced or successful than they actually are. I used to do 4 cold-networked VC calls a week, and I’ve largely stopped because I can’t take the fakeness and transcational nature of these calls. You always end it by saying you’d love to stay in touch, even if the person is someone who you would rather never see again.
The reason for this is simple: it’s a network-driven industry. You want to have the biggest network, the largest reach, and the greatest number of people who speak well of you based on limited interactions. It’s important then that everyone is impressed by your background, and that you leave a an impression that’s reflective of that background, no matter how much you fabricate it. There’s a lot of personal branding in venture. Personally I’ve always tried to brand on authenticity and telling the truth, regardless of who that offends, but I still have to put on a brave “networking face” and smile through it all from time to time.
That’s cold tea though. Let’s kick this into boiling.
The most important lies that fall into this “grey area” are lies of omission.
Let me tell you how I do this. For me, I really only omit personal details, specifically, my age. Sure, you could call that posturing, but really it’s a bit more serious and a bit more methodical than someone bragging about how much carry they get on a phone call. At 23, I’m very young to be a senior associate. That’s a big red flag for most people, in hiring, funding, and getting funded. So, I omit my age. I don’t lie about it when asked directly, I don’t pretend about anything, I’m just honest about my experience and avoid the topic like the plague and skirt around questions that hint at it.
Does age really matter? I personally don’t think so. I think if you look at my track record, the investments I have, and the boards I’m on, that they more than back up any credibility. But you’d be shocked how quickly people will inherently discount experience based on number of years on the planet. And I don’t want to hurt my firm or myself on that judgement and personal bias.
Other VCs will do far worse. People will conveniently forget to talk about companies that are doing poorly. Leave out bad founder references from DD checks. Omit markdowns from their portfolio, or push them out as far as humanly possible. Or even omit conflicts of interest when talking to founders.
Why is this a problem?
Lies of omission are dangerous. They fuel hidden, underlying, nefarious intentions, even if they don’t properly hurt anyone. And are often harder/impossible to spot. Take the case study of a founder reference. Just because a VC wants to get their own company funded doesn’t mean that they should lead someone into a can of worms scenario.
Even lies of omission are a clear violation of the principals of intellectual honesty and fiduciary responsibility. We need to be better if we ever want to move the industry forward.
But even these aren’t the worst lies we tell as venture capitalists. More on that soon.
