The Venture Capitalist and the Start-up Lemonade Stand

Disclaimer – I greatly respect the many impressive and successful venture capitalists investing in startups producing real products and fulfilling genuine product needs. I applaud the entrepreneurs who are creating these new companies, as well as the VCs who fund them. They are important, and I regret that there are so many charlatans and carnival barkers making a mockery of the process of steering capital to business start-ups.

But I have spent way too much time - including a few wasted years in my own career - around people cosplaying the start-up lifestyle, and watching incubators get all excited about the latest “Carbon-Neutral Doggie Waymo” or, God help us all, yet another time-sucking software product to help companies monitor employees’ goals and “engagement.”

With that said, Chris Bakke had a hilarious tweet recently about taking his child’s lemonade stand to venture capitalists. I particularly like how he got “AI” into the name of the “lemonAIde” business.

It's spring break and my son started a lemonade stand. I asked him how much lemonade he sold in the last hour.

"$3" he said. I told him, "Here's $20 for one glass of lemonade. In one hour I'm going to come back and buy a lemonade for $1,000. You're going to take that $1,000/hr revenue - multiply it by 24 hours - then multiply it by 365 days, and tell VCs, 'I have $8.76M in run rate revenue with 99.9% net margins, and 100% of our latest cohort of customers have expanded revenue with us. You're also changing the name of your lemonade stand to 'lemon(AI)de' and incorporating it as a C Corp"

My son was holding back tears.

I said, "Doesn't it feel good to be a millionaire, bud?" He said, "Dad I'm 4 and I don't know what any of these words are."

I said, "Welcome to life as a tech CEO - neither do I" and drove away.

There were some pretty funny responses too, including the following:

“Forbes five under five.”

“I could have sworn Jim Cramer was just raving about this company!”

For those of you missing Ace’s evening Cafe and feeling that I’m out of my wheelhouse, please know that I’m bootstrapping my way through his absence, dealing with an aggressive burn rate, and knowing full well that vultures at the accelerator are ready to come in with an elevator pitch if any of you think I’m dishing out nothing but vaporware.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 07:34 PM

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