How 99% of VCs are fraud
I always wonder why most people would want to claim the fact that 99% of startups fail, while ignoring the fact that 99% of VC firms are no better. In fact, a lot of these VC firms are just complete fraud. I might be wrong though.
Have you ever met or pitched a fishy VC firm and got one of the below answers? If yes, which answer did you get from your last investor pitch?
- we think it's too early for us;
- we need to see more traction;
- we don't understand the space;
- we don't have money to invest;
- we only come in late stage;
A few years ago, I found a VC firm. Their website states "We invest $250k to $500k" in early-stage startups. At that time, our startup was doing $75k MRR and we already had a lead investor willing to write a $150k. So, when we pitched this VC firm, their response was "this is too early for us". But when we quasi-tracked the MRR of their biggest portfolio, it was less than $50k. Another thing that was really shocking is that on LinkedIn, they claim to have backed more than 55 startups in 2021 alone. But when you read the blog post about their last fund, it was $10 million.
Well, for most VC firms, being brutal is part of the game.