Angels Den, TechCrunch and bullshit detection

Bullshit detection is a must have skill for entrepreneurs and journalists alike.

Telling a great story, whether you’re talking something up, or talking something down is also a stock in trade of both callings, if I can call them that.

The Clash - in the garage with their bullshit detector

But to use a few lazy, bullshit stereotypes myself for a moment, entrepreneurs are traditionally seen as optimistic and inclined to exaggerate, while journalists are seen as cynical and inclined to denigrate. Often when the two meet you get interesting results.

Witness the hoo-ha around a story about online angel network Angels Den which appeared on TechCrunch earlier this week.

Sound and Fury

The piece written by freelancer Milo Yiannopoulos, who until recently wrote for the Daily Telegraph, appeared to contain at least one factual error and provoked a storm of comments and counter-comments about the value or otherwise of Angels Den and its move into the ‘digital’ arena following the appointment of Irish opportunist Paul Walsh.

You might think this is all a huge storm in a teacup which incidentally will suit TechCrunch which gets more page views and Angels Den which gets a lot more profile than the Paul Walsh appointment would have received otherwise.

But I think it’s also quite instructive for startups and those writing about them.

Big numbers, big scrutiny

I wrote about Angels Den soon after it launched and was a little cautious in recommending it to readers.

It turns out, however, that two years on co-founder Bill Morrow and his team claim to have completed 157 deals worth £25 million in funding.

They’ve been keen to point out their disruptive startup has rapidly become the most successful angel network in the UK – at least in terms of getting money into the hands of startups and entrepreneurs which is what it’s all about. Genuinely good news.

But inevitably, and I believe rightly, when a startup puts out a story like this the bullshit detectors go up.

That’s not a judgement on the integrity of an entrepreneur, but merely recognition that some people talk up stories more than others.

When you’ve seen and heard as many over-hyped press releases and pitches as most journalists and bloggers have, you begin to realise why their first response is often a sceptical ‘really?’.

Think of it this way: the bigger the number you quote or the claim you make the more scrutiny it’s likely to receive. Don’t quote numbers you wouldn’t be happy to share in due diligence with an investor.

Where Angels Tread

Bill Morrow - co-founder of Angels Den securing significant angel funding for his punters.

In the TechCrunch piece Bill Morrow is quoted as saying Angels Den had “just over 10,000 entrepreneurs looking for money”. Blimey, I thought, that’s a lot of people forking out £99 to submit their business plan and a possible further £400.

On that basis Angels Den would have turned over well in excess of £1.3 million in two years without the recent introduction of a 5% commission on done deals.

So I gave Bill a buzz and asked him about the figure. He corrected my misconception and made it clear only a proportion of those 10,000 had actually submitted business plans, although for commercial reasons he couldn’t disclose the percentage – which to be fair is understandable.

Interestingly from a business perspective, Angels Den, while successful, seems to be doing a lot better for its punters than it is for its own bank balance, which may be why it’s introduced the 5% commission on deals and is looking to target the busy web/tech startup space.

Blog Bullshit

But you need your bullshit detectors finely tuned when you’re reading bloggers or journalists too.

Take my own harmless observation above about Milo Yiannopoulos having ‘until recently’ written for the Daily Telegraph.

This small phrase could provoke the reader to wonder why Milo no longer works for the Daily Telegraph. That combined with mentioning the equally minor factual error in his TechCrunch piece may imply something negative.

In a similar way Milo’s own phrase ‘Something’s going on at Angels Den’ combined with leading on someone quitting rather than a new appointment could be perceived as straight factual reporting or a negative insinuation.

Direct challenge is always better than insinuation in my book.

As for me, well I’ve recently dubbed myself a journalist entrepreneur so, to be honest, I’m well beyond bullshit.

Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog. http://www.smallbizpod.co.uk