Several years ago at this very table in the Starbucks at Capital Towers, I met with an investor to debrief him with some feedback after helping his company in its search for new capital.

It was the same year that Joseph Schooling won Singapore’s first-ever gold medal in swimming at the Olympics. I would find out shortly that the gold medal wasn't simply just a victory in the local sports scene but a go-to symbol used by a delusional few who think they can also be champions. It was on that day at Starbucks that my investor took this spirit with him into the fundraising process.

We had just gone on a two week roadshow and had met with eleven fairly prominent investors in the local startup scene.

Every meeting we attended involved a productive dialogue with both sides making the introductions and talking about the story, the pedigree of the founders, the company, technology, market, opportunity, etc. After more than ten roadshows, none of them unfortunately said ‘yes’ to funding this 'dream'. So he asked me:

“Why did Joseph Schooling win?!”

I could sense the rhetoric undertone and a little impatience. I replied:

"Erm...because he trained hard?"

"No!! It was because he believed in himself!"

He was alluding that we did not believe in the business enough to sell the story effectively. At this point, his face was so red I swear he looked like he was going to blow his head off.

He continued rambling about how Schooling, being a young boy born and bred in Singapore, became a global champion, all the while drawing parallels to his company - A 'champion' in the making.

“It is a no brainer. People should be lining up for this! Why aren’t investors buying our business?”

I just sat there, wide-eyed and speechless.

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The company went on to put together a product demo on my suggestion a couple of weeks later as part of a follow-up from our roadshows.

We sent invitation memos to the folks that had we had met and informed them about the proposed two-hour session to be held in the company’s office at Telok Ayer.

I had thought it was a good idea.

It was an opportunity to see first-hand how the product worked in real life. More importantly, a second chance for the company to prove itself and make a tangible impression after that first meeting.

We sent emails to all the investors we had met and only two replied. Eventually one showed up, largely because his office was located around the vicinity. Nevertheless I looked forward to it as it was also the first time I would be watching the demo, and so we went ahead.

But the outcome was un-impressive to say the least. The demo did not go as smoothly as expected.

There were technical issues and people ended up waiting while the engineers troubleshoot the problem. Long story short it all went as if the company was selling an over-priced archaic software that was full of bugs. Fortunately (or unfortunately) we had only one investor on scene to watch.

We stopped the roadshows after that and I learned a few things:

• You can't put lipstick on a pig. A commercially viable product is at the heart of any start up. No company should raise institutional capital without being able to produce a working prototype or demonstrate an orderbook of customers.
  

• You can never have a rational discussion with a delusional person. What I had seen in the founders was a blind and almost religious belief in their product—to the extent they weren't even open to feedback. Having devoted almost all their time into the product, it's easier for founders to be oblivious to the shortcomings of their own business. Self bias is very real.
  

• An employee-CEO - someone who is not a founder but hired to raise capital for a startup is almost doomed to fail. There is simple no skin in the game. A founder that throws money to delegate a CEO for fundraising can be a huge red flag and a potential recipe for disaster.