Welcome to billion dollar startup where We bring you Visionaries and disruptors Who have started scaled sold or invested In a billion dollar startup also known As a unicorn we also feature Tech Founders who are building the next Billion dollar startup billion dollar Startup is a unique podcast sponsored by Dragonx Capital The Venture Capital firm That concentrates on seed and early Stage tech companies with the X Factor I haven't shared a war story with us That our audience can learn from uh There are so many but we could probably Do a series yeah it's the first one There is one that always comes to mind Um Because it brings together some of the Mistakes many of the mistakes that one Should make all in one in one Entrepreneur there's a gentleman that I Met over 15 years ago that claimed he Had the best tech of whatever you can Imagine and I kept asking so what is it What's the problem you're solving and it Goes we just have the deepest technology And I said okay what does he do well I Can't tell you because we don't want Anyone to know but we want to raise 25 Million dollars well do you have any Revenues well I can't tell you And whatever I said He responded by saying I was secret and this and that but it
Goes but we have IBM as our client we Have this CIA as our client but do they Actually have clients well I'm getting To that okay So I said you know what uh I appreciate It but I'm not interested and he kept Calling he goes you don't understand What you're passing up on and this is This is the most important company in History we're going to be the next Unicorn we're going to be doing hundreds Of millions of dollars in revenues and So on and so forth so you talked in 15 Years 15 years ago okay five years later I saw him in another conference I said How's it going because we're doing Amazing we have all these clients and We've raised money and I said so what Does the company do we can't tell you we Don't want anyone to steal our ideas so On and so forth And discontinued every few years I would See him at a conference and he would Repeat the same story Um until uh about a year ago and I saw Him again this time he's raising money Except for he had talked to someone that We both knew about that and it turns out He still doesn't have revenues all those Customers were unpaid they were just Services doing consulting for them he's Pissed away over you know ten and a half 11 million dollars wow and he's still Telling everybody he's the most he still
Doesn't want anybody to know what he's Doing The reality is he doesn't have anything The reality is he doesn't know what he's Doing the reality is he can't even tell Me what that's the problem he's solving And he's just gathered around himself a Lot of people that he calls you know Senior advisors to the company and all Of that so it's very common thing and if After 10 15 years you still cannot show Any attraction you still cannot Demonstrate product Market fit but isn't That also very being very irresponsible Extreme to to investors extremely yeah And uh which is why I am hugely against It but there's always people that Believe it and put more money in I've Seen this so many times I've seen a case Like this with 28 million in I have seen A case like this with 36 million it's Almost like I guess in some way the I Don't know if the essence should say the Investor's fault but they have a little Bit of gambling mentality too right you Know they believe the entrepreneur and They think but they don't know the Questions to ask yeah they don't even Know They don't know how if this is but they Don't they say well I like this guy he Seems smart others say I like his idea He seems smart and I'm like which is why I say for the other investors how many
Investors doesn't have a clean cap table What is about she looks like how long Has he been in business if he's been There for more than 10 years and he Still doesn't have Revenue something is Wrong and most Individual investors that have recently Coming to money and are now looking at Investing in Tech all fall into this Category and they lose their Investments It's a very very common scenario and it Happens all the time Which is why we really believe in the Implementation of institutional Institutional Capital into these Companies because there's ideal Diligence and I tell my friends always If someone is coming to you to raise Money And you're in the business of real Estate that means somebody like me has Said no And that's why you shouldn't do it Yeah and then for for this guy chances Are you'll meet him again a few years The same same same story again and Again so unfortunately this is such a Common thing I get very sad they almost Like I don't know I I've to also met a Number of these Founders they live their Own little fantasy world you know I They're like they keep going at ghosts There I call them um but they're not Interesting they're not Enterprises
They're not actually building anything If you if you are working on something For over 10 years without any results You have to step back and say either I'm Doing the wrong thing yeah or I don't Have to I have the wrong person to do it I don't have what it takes which is why If you come to a VC whose experienced They will ask you why are you solving This problem why are you the right Person and why is not the right time and That's how we assess it but most people Don't do self-assessment and they're Unwilling to accept that either what They're doing is not worth doing or the Wrong person to do it yeah yeah because They're so smart they know everything And the rest of us are dumb by the way This is far more common than you could Possibly imagine yeah yeah and I think In this case the the worst enemy for for Any Tech found entrepreneur it's the ego Yeah but the ones that are smart the Reason I like people going to to VCS Early on is not just for the capital but For validation as to whether what They're doing is worth doing yeah or Even they get a little bit of money not That even a time this is you're not but Now never mind just the money I'm saying The capital is important but it's even More important is the population of Knowing are we going down the wrong path Or the right path is this the right
Thing or the wrong thing they don't want To take feedback No because sometimes people are Unwilling or unable to take negative Feedback or rejection yeah and a lot of People who don't want to be seizures Because they hate rejection yeah but and Somehow they kind of demonize VCS too Right oh these guys are vouchers I do agree I do agree I do agree but Again so this instance is one that I Want to bring up because it is such a Common one uh that people need to be Cognizant of it if you enjoy the stories Make sure you comment below or leave a Review on our podcast so we can share More war stories with you yes until next Time happy unicorn hunting we appreciate You joining us for this episode of Billion dollar startup Be sure to rate review And subscribe to The show and visit dragonx.com for more Resources based on today's topic as well As for access to previous episodes That's dragonx.com thank you for Listening
