Don’t make claims you can’t back up.

Posted on Posted in Investing, Mentoring

I have a very selective memory, my wife will tell you I can’t remember names, not just people, but places or things.

It’s kind of a handicap and causes occasional embarrassment, however it leaves room in my brain for important stuff. As an investor and businessman I remember everything, I mean everything. If you tell me something and it is pertinent, I will remember it and if important I will ask you to verify it at a critical stage. So don’t make claims you cannot substantiate.

About a year ago, I had a founder approach me seeking investment for his company that claimed to have developed a disruptive and game changing app. Very good, but it had been done before and creating the app was not significant. Getting it adopted and becoming the de-facto standard would be game changing. To this end he claimed to have an order from a very large cellular operator. Because of that he was looking at a significant investment and because of that I was very interested.

Talks progressed and I was happy to take a significant stake, so all that was left was for me to see the order. I asked him to send a copy and was offering to sign an NDA if requested. At this point, the mood turned and after lots of deflection and side stepping I was told that an order would be on the way if the founder raised the money.

That was the last time we spoke.

So don’t lie to me, it happens often and has never worked. It just wastes both our time and restricts your options in the future.

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