Ethics
Too Much Banking Backdoor Information Flow
Most people believe that you can trust your bank. For the most part this is true however, if you are a small business person the chances are that your information is being passed on by loose lips. For instance you might become a topic of conversation at a party where an off duty teller mentions that you are loaded or that your business does not have adequate cash flow. Another instance might be the branch manager or an assistant manager of the branch who discusses your financial position with members of his Rotary club. I have seen this happen before and heard conversations.
In fact I remember hearing a conversation about me and my business at a party where the other party did not know that I was the business owner. It was at a Chamber of Commerce mixer and in they were talking about my franchisee and their financial position with a lawyer and another small business person. There is way too much banking back door information flow.
But it gets worse, as your business gets bigger you will find that venture capitalists and investment bankers will often pass on information to your competitors, creditors and their potential partners. I remember one time when an investment banker who had invested millions of dollars into my competition's kitty, pretending to be a franchise buyer of our franchise system. The next day, I got a phone call offering to loan me money or to buy my company. However, remembering that the day before they had called using trickery and misrepresentation; I conveniently told them where to stick it.
The moral of this story is to be careful of your banker and to what you tell venture capitalists and investment bankers. Many of these people are involved in other deals, mergers and acquisitions, as well as other investments perhaps even with your competitors. Every single piece of information you give them you should expect that it may end up in the hands of your competitors. Never trust a banker or any professional wearing a tie who smiles and tells you that you can trust them. Trust me, as I do not wear a tie and I am not bank of Lance. Consider this in 2006.
Lance Winslow
Lance Winslow
Tags: Banking, deals, investment banker, venture capitalists, Backdoor Information FlowSimilar articles
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