Worked at a place that shall not be named, back before startups were hip and trendy. They had received capital funding from a local collective of business folks. Lots of bad use of the money and telling investors versions of the truth.
I remember one time, the big boss was showing an investor around and brought them back to the IT area. I was third man in the company, but first one with no shares, so I was completely ignored. The big boss points towards a good-sized computer cabinet and tells them that's the production system. Not so much ... the production system was under my desk as we hadn't ported the system over to the big fancy box yet. No big lies, but just a constant stream of embellishments and reasons why the lack of success was everyone else's fault.
Don't know that he learned it at business school, although he did have an MBA, but he was also a Chicago banker. No telling what counts as legitimate business activity inside the loop.
Investors bear some culpability for this. The criteria that they sometimes use to judge their investments is... umm...
I had an investor once tell me with a straight face that he only invests in founders with a "prominent chin," because that "physiognamy" indicates someone who is an "operator." (Edit: he wasn't talking about me. It was at a conference. He had a beer or two in him. But I think he was serious. The context was serious.)
I am not making this shit up. Said investor who shall not be named operates a venture capital and business consulting firm out of Atlanta, Georgia and New York.
Given the quantities of money involved, I am kind of floored that more rational and scientific methods are not brought to bear on the problem of capital allocation. Don't get me wrong. The best of the best do think at least somewhat rationally about allocating their capital. But there is a ton of dumb money, and in my experience the dumb money tends to chase flashy fast-talking boatloads of bullshit piloted by sociopaths.
Edit: that's also why these guys always make a beeline to IPO. The stock market is the dumbest money around. I'm not saying all IPO-driven companies are sleaze-fests... but there's something about how they do it. They do everything they can to create the immediate impression of success in order to push for IPO as fast as possible, cash out, and leave. Groupon is probably the poster child right now.
I remember one time, the big boss was showing an investor around and brought them back to the IT area. I was third man in the company, but first one with no shares, so I was completely ignored. The big boss points towards a good-sized computer cabinet and tells them that's the production system. Not so much ... the production system was under my desk as we hadn't ported the system over to the big fancy box yet. No big lies, but just a constant stream of embellishments and reasons why the lack of success was everyone else's fault.
Don't know that he learned it at business school, although he did have an MBA, but he was also a Chicago banker. No telling what counts as legitimate business activity inside the loop.