• In Brief

    Respect the VC hierarchy

    180Px-Michael Moritz-1Guy Kawasaki — by David SifryDespite his unfortunate track record as a venture capitalist, Guy Kawasaki does give some appealing blunt advice to entrepreneurs. The big no-no, when pitching a business? "[Do not] try to create the illusion of scarcity. Many entrepreneurs claim that 'Sequoia is interested.' If Sequoia is interested, you should take its money. If it isn't, then the venture capitalist won't be either. Either way, don't even think of blowing this smoke." Of course, it's not quite as simple as that. If other blue-chip venture capital partnerships, such as Benchmark and Accel, for instance, are hot to invest, it probably does no harm to let them know, subtly, that they'll have to outbid Sequoia. It's only if an entrepreneur has already worked their way down the list — all the way down to, say, a in-desperation-only investor such as Guy Kawasaki — that the hint of Sequoia's interest has no credibility.

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