Feb 22, 2011

The Wanna-be Entrepreneurs - Please Don't Apply

I find it amazing how many people want money for a startup venture - and how few of them have any common sense about how (un-)valuable their company really is.

A wine guy wants $5M for a company that has no assets, no income (and no competitors, which supposedly is supposed to turn me on - not so, buddy.  No competitors = no money to be made in that space.  In any case there are ALWAYS competitors - even if it's nothing more than putting up with the status quo.)

Another wants $3M for a dating website - no site built yet, so of course, no money/assets, etc. and the guy has no skills to bring to the table to actually build the site, which I might be able to invest in.  Generous guy though - he's willing to offer me 25% of his company.  Wow.  So, let me get this strait: I give you $3M for you to build a website, and your role will be....?  Oh, I see: overseeing the project.  I can do that myself for $3M, buddy.  Good luck.

I get hundreds of these types of requests each week. 

Luckily, I also find a few nuggets of gold every now and then: people with the experience and skill to have a chance at winning in a startup venture.  Or companies that have a long, steady track record who've come upon hard times who need a workout to get their company turned around without their loosing control.