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Complicated storytelling


This is true for many investment banks. And people pay for complexity.


 

But it's an odd world:


  • Founders chasing publicity on social media, focusing on selling stories rather than selling products

  • Companies (especially funds) announcing (and celebrating) an investment or acquisition in a business, almost sounding like: “Look, we bought these guys” or “Hey I pulled that off, can you?

  • Entrepreneurs focusing too much on beautifying powerpoint slide decks and looking for investors instead of devoting more resources towards building a real product and looking for customers.

 

Some people spend too much time going around begging angel investors and VC funds for money to build their business. I once told a friend:

Raising capital is equivalent to "cash flow from financing". Why don't you focus more on developing "cash flow from operations?".

The same applies to private fund raising: If you have to wait to bring in OPM (other people's money) before kickstarting your fund, maybe you really shouldn't be in the PE/VC business.


The end result is the same: solving for that funding gap.


You are much better off spending your time and resources looking for customers (who are by the way, also non-dilutive to shareholding) rather than chasing after beauty pageants and roadshows month after month trying to bring in investors.

 

I think a big problem nowadays is that many of us over-relate to what we read in social media.