[chris123]

You do want them to confirm that they do not have a conflict of interest. if they are not willing to do that, you're probably dealing with one of the many bottom feeders in the biz. See my comment below/about about how checking for conflicts of interest.

[tptacek]

Like they'd ever tell you.

One VC, after investing in a company I was at, deliberately fed us the pitches of competing companies that were pitching them. Thanks, VC!

Another VC, in a second partner meeting, stocked the room with the m-team of a direct competitor. After the meeting, the competitor talked about "buying" us. Thanks, VC!

Note: in neither case were this minor VCs. You would recognize them.

[chris123]

So, by your logic, because you might be lied to, you should not even ask. Smart.

Regardless of the truth of an answer received, when we ask questions, we gain information. If you ask a question and are lied to, you have gained valuable information about the person, among other things.

It's all about information and you get that information by interacting with your counterparty. Even if they sit there and don't make a peep while you talk, you should be gaining valuable information (unless you're a unobservant). If they open their mouths, you gain even more. If they put something in writing, you have it in writing.

The most valuable information often comes from what people DON'T say or when they lie. Don't have time to discuss further today, but people figure that out on their own over time. Maybe.

In our "Do you have any conflicts of interests example?" If you ask and you are lied to, you have what you need. They are locked in. They have made a representation, in writing. You have relied upon it, and you have told them that you are relying upon it (before you peel back more layers of the onion). It has legal and ethical consequences for them.

Regarding your examples, sounds like you might have had unethical people inside your company and got what you deserved. Birds of a feather flock together. Also sounds like you guys were as trusting as schoolchildren and got fleeced. You did not ask the right questions, such as about conflicts. You did not require the right, or any, conditions precedent. Smart.

[jacquesm]

> One VC, after investing in a company I was at, deliberately fed us the pitches of competing companies that were pitching them. Thanks, VC!

Well, but would you ever want to deal with that VC again ?

Thanks but no thanks, VC. We already know you can't be trusted. I'm actually surprised that you would accept such information, I find it highly unethical.

[tptacek]

I'm not going to get any more specific about the circumstances, but my conscience is clear and I agree about the ethics.

As for "that VC" --- if these ones were so sketchy, why would I assume the lesser-known ones were better? Maybe they are. I've met some VC's I really liked personally. David Aronoff at Flybridge was fun to talk to, for instance.

I'm sorry for tarring everyone with such a broad brush, but I'll note that Graham made the exact same point in "A Unified Theory of VC Suckage".