The post was originally published in Polish on Szymon’s LinkedIn profile. Szymon kindly agreed to republish what we think is of great value to our readers.
The mysterious business angel turned out to be a mythomaniac.
A startup was looking for capital on the market. Today’s times are what they are, and after months of failure, the startup was open to all possibilities – not to say desperate. It had no luck with funds. An attempt to approach equity crowdfunding failed before it even started because of the cost. The hunt for angels continued.
Szymon Janiak, Co-Founder and Managing Partner at Czysta3.VC
Suddenly, the situation has changed by 180 degrees as a private investor showed up and agreed to finance the entire round. There was disbelief at first. What kind of a person is this? They haven’t built any well-known company, nor have they worked for any significant brand. At the same time, they claim that they will invest several million. What to do? Should we take it seriously?
Conversations about conditions begin. Reaching an agreement is quick and surprisingly easy. The result is a draft contract – a loan convertible into shares, so that it is the fastest. The contract returns after a few days with minor corrections and a preliminary OK. After making changes, there is a formal acceptance – a late night email comes with the signed contract.
Euphoria. Finally, after months of hardship, it worked. You can pay outstanding salaries and gain momentum again. Action begins immediately – why waste time. The campaign starts, negotiations of a new office and employment.
More days pass, but the transfer does not turn up. The investor assures that these are temporary perturbations. The supposed reason is the problems with the bank. Later, they claim that there are a few formalities left, but they have no time to do it personally. Then there were trips and illness. Subsequent explanations only built up more anxiety and stress. Finally, information came that the transfer had left, but there was no time to send the confirmation. As one can easily guess – it never arrived.
The contact was broken. Everything collapsed. After some time, it accidentally turned out that this would-be angel was a mythomaniac who for some reason likes to play investor, but has never made any investment. The money was just a figment of their imagination. It is not known why they did this.
The startup had to fire the entire team and was left with debts. The contract can be put in a frame and hung on a wall.
Could something have been done differently? Sure, it was possible to carry out a deeper verification of the investor, refrain from actions until the actual transfer, involve more formalities.
At the same time, to understand such a situation, you need to know what it is like to fight for months for capital in a startup that needs to survive and suddenly receive this one ‘chance.’ Extremely often in such cases, the sinking razor catches. On the other hand, I personally am no longer surprised by anything…
The story appeared to be quite resonant in the comment section. A commitment downpayment was popularly accepted as a remedy. Other insights included:
Maybe this investor took to heart texts saying things like ‘If you want to have money, behave as if you had it and you will see that it will appear’ and was waiting for it.
– Joanna Drucka-Podbereska, Founder at Savour-Faire.pl
This reminds me of the incredible story of Vann Ly – a businessman from Cambodia who was supposed to buy FC Wisła Kraków and save it from bankruptcy.
– Marcin Stawowiak, Co-Founder and Executive Manager at Smultron Software House
He who looked for capital for a startup does not laugh in a circus. Such situations are the tip of the iceberg and you won’t understand them unless you have survived them. Fake investors, fake intermediaries-extortionists, mythomaniacs, ‘businessmen’ willing to share for a nice smile, etc. A nice story – unfortunately, one of many.
– Damian Augustyn, Scrum Product Owner at eSky Group
It is simply amazing how the formula of a startup attracts mythomaniacs. Although I have a growing feeling that it creates them…
– Paweł Grajkowski, Product Owner at PSNC Future Lab
Szymon Janiak is an investor and a business-driven Managing Director at czysta3.vc, a Venture Capital fund located in Poland. He has over 10 years of experience in the technology sector. Szymon is also a Member of the Supervisory Board at stockbroker Grupa Trinity S.A.
