I was very interested to read your cover story concerning venture capital companies ("Why Smart Companies are Saying No to Venture Capital" August 1984). We have another horror story to tell about the problems of dealing with venture capital people.

I developed a new type of consumer product and a new marketing concept, drawing on my experience as a former marketing executive with Mattel Inc. and president of a national home furnishings company, using more than $100,000 of my own money. I assembled a team of advisers that includes the former senior vice-president for merchandising, the former vice-president for new business development at Dayton-Hudson Corp., and a former senior partner at Arthur Young & Co. They determined that this new concept and the products were so exciting that a projected sales volume of more than $100 million within 30 months of starting the company was reasonable. We would use highly leveraged financing built around $1 million in venture capital.

At this point, a major venture capital firm became interested, and they hired a former group vice-president from Montgomery Ward & Co. to evaluate the project. He reported back, "The product is right, the concept is right, the marketing is right, the projections are too low, the people are right, the market is ripe!"

The venture capital firm's Harvard MBA (one year out of school) then took over for his evaluation. We defined our president as someone out of a major retail department store; he said it should be manufacturing! We said we wanted this person to have national marketing contacts; he said contacts didn't mean anything, and if the product was right, it would sell anyway. He doubted the financing plan would work, because it had never been done before and it was too sophisticated; we already have a commitment for 1 of the 18 financial packages and the opinion of industry leaders that the plan is brilliant.

He made promises about when certain things in the evaluation process would be done, then proceeded to miss the dates by weeks and months. We decided that we would be dead if they performed this way after funding.

Well, we were turned down in the middle of May on the basis that we were not high tech and they didn't understand the business. There is now a big sign over my desk, "Under no circumstances are you to send your grandson to Harvard for an MBA."

After all, we only represented more than 200 years of experience, plus the opinion of the venture firm's own consultant. But then, we aren't well educated, because we don't have Harvard MBAs. We feel there is a serious void at Harvard in the teaching of understanding of entre-preneurship and the value of experience.

Maybe we will get funded and maybe we won't. But the experience has taught us all about why venture capital companies are having the troubles you defined in your story.