Entrepreneurial Liars and Cheats

Many entrepreneurs are dismayed by the slow pace of due diligence checks by potential investors. How many interviews, how many financial documents and resumes and business plans must they submit before getting a thumbs up or down?

This process might be more understandable if entrepreneurs realize that THERE ARE SO MANY LIARS OUT THERE.

Liars will be outed

1. Consider the process of home sales. Just as in real estate, investing in a company is proceeded by a period of judicious inquiry and inspection, recognized by both parties, ending in a legally binding closing, scheduled weeks in advance. (This is why I never believe an entrepreneur who blithely reports, “I'll be funded by then” without even having a letter of interest (LOI) in hand.
2. The reason for protracted due diligence is because, sadly PEOPLE LIE. As Catholics understand, there are lies of omission and lies of commission. The former is when a home seller neglects to mention a material fact, like a rotted roof. A lie of commission is actually writing or verbalizing a falsehood, like checking the word “no” on a form that lists “do you know about this or that.” Just as a home seller may obfuscate termite or water damage, companies seeking investment may similarly “put lipstick on a pig.” Repeat investors know this, so they endeavor to separate the wheat from the chaff through careful scrutiny. As any on-line dater knows, anyone can sound good, but how do they appear up close?

A sincere and honest entrepreneur may be aided by the following short list of several entrepreneurs who have approached us recently, each with constructed stories which omitted or fabricated information. If you can appreciate how many such people approach investors (and service providers) you can understand the logic behind due diligence of your company.

Following the list are recommendations to help honest entrepreneurs make a strong, initial impression. For additional anecdotes about other bad guys (both entrepreneurs and service providers), see prior articles on this website.

A Bear Family Moves Into the Yard - What to Do?

Cub in birch tree
photo from back porch

Two weeks ago, while playing backgammon after dinner, my husband noticed some dark movement through the window. “Bear!” he announced. He ran to the back window and I to the side. “Wow, it's a big one,” he observed. But through my window, I saw a cub. Oh-oh. One of the most dangerous combinations is a sow feeding and defending a cub, and in this case, she had three of them, each the size and bulk of a small sheepdog.

This black bear family was disconcerting for other reasons, too, namely the sow's seeming familiarity with cabins and her absolute fearlessness around us.

For example, we immediately started banging on the windows and shouting to discourage

Sow at kitchen window
"What - you want a piece of me?"

their presence. Undeterred, she climbed up onto our back porch, bumping our door in the process, stood up and looked in the window, eye level to me ( I am 5' 9"), with a look that I interpreted as, “What - you want a piece of me, punk?” Then, she deftly swiped a small plastic container off a shelf (in which I had the day's coffee grounds and egg shells intended for my garden) tossing it to the cubs who rummaged through the debris.

Bears are usually quiet, wary creatures.  A whole family in our yard, in daylight, is not a good sign. We wanted to encourage them to go elsewhere.  While they were distracted by the egg shells and coffee grounds next to the back porch, Bryan moved to the front door for a can of bear spray. We knew, from prior practice, that the spray reaches only about 20 feet – a closeness we did not intend to attempt, since bears can run 30 mph over short distances and moms can be especially prickly. Nonetheless, he sprayed, to saturate the air with the noxious fumes. The sound or scent caused the sow to turn and walk INTO the spray. When the pepper fumes irritated her eyes and nose, she

Two cubs climb spruce by outhouse

trotted away, giving an alert to the cubs who nimbly climbed the adjacent spruce trees for safety. In less than a minute, though, she turned around, walked THROUGH the spray, past Bryan, and toward our ducks, who were standing by the lake shore, squawking in alarm this whole time. They were able to glide off into the water to evade her, but alas, one of our hens had followed them, and was cowering behind some ferns. The bear spied her, dashed into the foliage and made off into the woods with her limp body clenched between sharp teeth. Two of the cubs followed into the alder thicket, but the third had found a duck's nest beneath a birch tree and was devouring the eggs. More willing to get close to a young one, I sprayed it with bear spray, so it ran off, too.