There are a lot of reasons to walk away, this is the one time to run
Last week, I called my stock broker, old-school style, and told the nice sales associate that I’d like to invest in 10 shares of Apple stock, please, but only if Apple bought 20 hours of my consulting time — which, I added, would only serve to make Apple a better, stronger company and increase their overall value.
It’s win-win, I said.
This didn’t actually happen. Because it’s laughable.
So why does it happen to startups all the time?
I got an email last week from an investor. It was one of those emails I had to read twice. On the second read, I realized it was basically a pitch to sell me services with a carrot of potential investment dangled to help sweeten the deal.
Now, before I go too far and insult some of my investor friends, let me make it clear that anyone investing in your company could and should be able to bring additional value that goes beyond just their money.
That value-add may come in the form of connections and experience, definitely advice, and in some cases the investor might indeed have a program they like their portfolio to follow. Private equity firms do this all the time. They know how to make money. They have a plan.
Then there’s NewChip.
This fee-based online accelerator was a darling of the startup ecosystem right up until they filed for bankruptcy earlier this year. That case begs the question: What “value-add” were those startup founders paying for?
I bring up NewChip because I’ve gotten emails from them too, and those emails read a lot like this one.
My favorite signal that lets me know I don’t have to read the message I’m about to read are the words “I came across”.
I don’t know why they’re still using it. It’s like the people who still call everyone “fam.”
But for anyone who doesn’t know, it means they “came across” your company name in the contact list they…