There’s a lot of money sloshing around Silicon Valley for new startups, but founders are apparently lying to compete for a larger chunk of it.
Dr. Bob Kocher, a partner at Venrock Capital who specialises in healthcare IT companies, told The Information’s Reed Albergotti that “a third of the presentations he sees include a ‘complete mistruth.'”
Kocher used the example of a startup claiming to work with healthcare giant Kaiser Permanente, but when Kocher performed his due diligence, he found out the startup had only talked with one player in the group.
He says that this is a result of the easy funding available now — startups are getting a lot more interest from investors, so they don’t have to be quite as forthcoming.
At the same time, venture capitalists are finding new ways to perform due diligence beyond looking at spreadsheets and slide decks. James Cham from Bloomberg Beta said he was recently invited into a startup’s internal chat room to check out the company:
First time I’ve done diligence with a startup by getting invited to their Slack team.
— James Cham (@jamescham) June 24, 2015