Keep It Real

Tulip mania swept Holland in the 1620s. And in the flower frenzy, speculators bid up values to unheard-of heights. As a matter of fact, the price of one black tulip bulb went as high as the cost of a typical five-story row home along the banks of Amsterdam's canals. How could such a thing happen?

The answer to this question may be found in the more recent Internet mania, which drove company prices to stratospheric levels as well. When looking at the values that are placed on businesses under the cold and objective light of hindsight, their absurdity depended on two factors: a lack of truthfulness on the part of entrepreneurs about the prospects for their businesses and a willing suspension of skepticism on the part of venture investors.

This perspective comes from Guy Kawasaki, founder of venture capital investment bank Garage.com and raconteur of the New Economy. His storied past includes seven books and a stint at Apple Computer, where he was one of the individuals responsible for the success of the Macintosh computer. With regard to the current state of affairs, Kawasaki, 46, says, "Somewhere along the line, boundless optimism for the future turned into fabrications and delusions." But, he says, investors have caught on and are now ready to catch the lies entrepreneurs typically throw at them, often bringing the initial meeting to a screeching halt. According to Kawasaki, there are some lulus out there; here are a few lies that have been heard over the past two years of modern-day tulip mania:

		Want to find out more about what you should-and shouldn't-say to investors to get them to hand over the cash? Check out the articles in our Financing Your Business section for more tips and tricks.

Content Continues Below

  Page   1   |   2  

Next:   Lies To Avoid »