This week’s episode of HBO’s Silicon Valley show used the term #brainrape.* Brainrape refers to when an angel or VC feigns interest in investing in your startup, only to get access to your startup’s proprietary information. Sadly, this does happen.
Obviously, some startups are more susceptible than others, but you can try to minimize the risk of it happening by doing these two things:
1) Before pitch meetings, ask every angel or VC (yes, even some big firms have sketchy practices) if they have invested in anything competitive – especially something that they have not announced publicly – or if they have plans to invest in something that an entrepreneur-in-residence at their firm is currently building that is competitive, and
2) Avoid emailing anything proprietary to VC firms or angels unless you get a second meeting and they seem serious about investing. Some angels are out to steal your ideas, while some VCs are out to gather info and share it with their portfolio companies. Some may try to poach members of your team and some may even try to steal both. Don’t assume that all people/firms function with a moral code.
*Note: I am not a fan of the term brainrape, but I guess it is yet another indication of the tech world’s ongoing gender issues.
