Bill Reichert's brother is a doctor. His father also was a doc. So were his grandfather and his great-great grandfather. So how could it be that Mr. Reichert is sitting and talking about venture capital over a plate of bacon and eggs at the Peninsula Creamery coffee shop in downtown Palo Alto? As I join him in the high-cholesterol meal, I can almost see the family of physicians staring down, wagging their fingers. "I'm the first Reichert male not to be doctor," he says, munching on a piece of bacon. "We figure it was my other grandfather's genes that sent me on this path."

Not the path to the coffee shop. The entrepreneurial path. His mother's father, Robert McElroy, built two companies -- one that eventually became the multibillion dollar American Hospital Supply. Following in granddad's footsteps, Mr. Reichert founded five companies of his own, including a software company while he was getting his MBA at Stanford, and he was instrumental in helping turn around The Learning Company (now part of Mattel (NYSE: MAT)). Now, as president of Garage.com, he helps seed- and early-stage companies raise money from angels and VCs. Along his entrepreneurial journey, the lean 46-year-old picked up a lot of Roy Rogers-style wisdom about the venture capital business. He distilled it into a top ten list of myths and realities that are guaranteed to raise someone's ire.

Myth No. 10: The Internet changes everything.

The reality: The Internet touches everything but doesn't necessarily change it.

"Conventional wisdom is that the Internet is the biggest technological phenomenon in the history of mankind," Mr. Reichert says, clicking on a Powerpoint presentation to prove it wrong. The computer screen shows a big ski slope and a smaller one. The big slope? I guessed television. Wrong. It's actually radio. In its first seven years on the planet, radio was adopted by 45 percent of the U.S. public. In that same time frame the Internet has penetrated just 25 percent of American households.

Slide shows aside, Mr. Reichert makes an excellent point for would-be entrepreneurs: "Just because you're part of the Net doesn't mean that the laws of economics have been repealed. You've got to have a real business."

Careful not to alienate Vint Cerf, Mr. Reichert notes that he "would never want to come across as someone who doesn't think the Internet is important. The Internet clearly can have a dramatic effect on the way business is done, but it's still business. That means it's still about creating value and creating profits."

Myth No. 9: Venture capitalists fund startups.

The reality: Venture capitalists fund established companies. Angel investors fund startups.

OK, this one's self-serving. Garage.com, which Mr. Reichert dubs a "venture gapitalist," hooks up seed- and early-stage startups with angel investors. Still, I must agree that early-stage companies are much more likely to find backing from angels than even those VCs who say they focus on early-stage deals.

"There is a whole bunch of mythology that has evolved that says, 'You find a couple of grad students, have a clever idea, go to Benchmark Capital, and get $15 million,'" Mr. Reichert says. "If you're serious about starting a company, you've got to be realistic. You scrape together a little money from friends, fools, and family and then when you're ready to go for outside money, there's a one in a thousand shot that you're going to get name-brand VC even at that stage."

Mr. Reichert's main point, which I think is dead on, is that too many startups have unrealistic expectations, setting them up for discouragement. "Don't limit your vision to getting your series A funding from a Sand Hill Road venture capital fund," he says. "There's this assumption that if, gee, I don't get Sequoia Capital in my first round, then I'll never make it with the big boys. There's a chance, but it's really unlikely that you'll get that funding. So, you need to expand your horizons and understand what you're looking for. Don't compromise on quality, but be realistic in terms of who is the right investor for you at this point in time."

Mr. Reichert speaks from experience. In his last company, Academic Systems, he didn't seek VC initially. It made more sense to get corporate cash. Academic raised $400,000 in smart money from Jostens (NYSE: JOS), which later brought in brand-name Accel Partners. It wasn't long before Kleiner Perkins Caufield & Byers was on board, bringing along two little companies named Microsoft (Nasdaq: MSFT) and TCI. "There was a very nice food chain effect that happened," he says.

Myth No. 8: I've got to perfect my business plan.

Reality: No one is going to read it. You only have a few seconds to attract the attention of an investor.

Mr. Reichert cops to the fact that Garage.com is just as guilty as other VC advice gurus. It has a 12-slide template that it encourages entrepreneurs to use instead of a business plan. "But even at that I'm very anti-template and very anti-cookie cutter," he says. "Every business has a different story to tell, and in each business the story has different points of emphasis." In other words, you need to understand your audience and tell them exactly what they want to hear.

Mr. Reichert advises entrepreneurs to focus on the four or five key questions an angel or VC will ask so that they can "preempt" them. How do you do that? Simple. Find three smart people at a cocktail party or some other schmoozefest and give your elevator pitch. "I bet you that each of them will have three or four questions in common," he says.

One other piece of advice: don't give VCs history lessons. "Story trumps history," Mr. Reichert says. "Don't spend your time recounting the history of the Internet or enterprise software. Tell your audience the two or three compelling things that are unique about you, and then answer all the first-tier questions." Be prepared to give concise answers when asked about your team, technology, size of your market, competitors, financial milestones, and so forth. Mr. Reichert isn't telling you to skip the fundamentals. "You need to do the work, but don't lead with that," he says. "Don't lead with 50 pages of stuff. Have good crisp answers as questions get asked." Having heard countless horror stories from VCs about entrepreneurs who needlessly try to impress investors with their knowledge of the industry, I must concur.

Myth No. 7: VCs back teams.

The reality: VCs back future returns. As one prominent VC once said: "I support my management team 1,000 percent until the day I fire them."

The main point here is to understand that your VC is your investor, not your friend or the parent you never had. Too often an entrepreneur hears a VC say he or she is completely behind the team and "there is a disconnect in an entrepreneur's head that the VC now feels as though there is this emotional bond between them," Mr. Reichert says. "And then they feel betrayed at the first board meeting when the VC pushes back on what they say."

While you may feel like your VC is betraying you, there is little doubt that your fundamental interests are aligned: "The alignment is around building a hugely valuable company," Mr. Reichert continues. "It's not aligned around your inner visions about how to craft a company. While the VCs buy into your economics, they don't necessarily buy into your philosophy of management. They'll be tolerant to a certain degree as long as you deliver the economics. But understand that it's about the economics."

A related pet peeve: entrepreneurs who say that VCs have given them money. "What you've got to understand is that they're not giving you anything," he says. "They're buying a percentage of your company. They're buyers, not givers."

Myth No. 6: There is more money out there than good ideas.

The reality: There are more good ideas than money.

Finally, one for the entrepreneurs. Of course, you know this is right from experience. You hear VCs time and again talk about how there is plenty of money in the market for great ideas. What they don't tell you is that you need to know the right people to get that cash.

The fact is, money isn't a commodity. There are lots and lots of good entrepreneurs with good ideas who can't get funded to save their lives. But don't despair. The real issue is that you need to get backing. That's what matters, not whose name is on the check. "Don't feel as though you're a failure just because you don't have Sequoia's money," Mr. Reichert counsels. "Very, very few successful companies started out with Sequoia's money. Now, that's not exactly the way Sequoia pitches it [he laughs], but understand the way the numbers ultimately work out."

PART-2: Tune in for the second half of Mr. Reichert's top ten list. You'll never guess what the No. 1 myth is.

EDITOR'S NOTE: Before you log off, I'd like to put in a plug for our new daily VC newsletter, Dealflow. I know, I know. You already get one in your email. But hear me out. Dealflow really is different than the other VC newsletters out there. It isn't an amalgamation of retyped press releases. Call us crazy, but we think you deserve real reporting with every item, so we call VCs and CEOs to get the inside poop. You just won't find that anyplace else. Check it out and let me know what you think. Get Dealflow daily, free, in your email by subscribing here.

Do you agree or disagree with the first half of Mr. Reichert's top ten list? Share your opinion in the VC P.S. forum, or visit the forums home page.

	SNAPSHOT
	COMPANY		Garage.com
	HEADQUARTERS		Palo Alto CA
	FOUNDED		1998
	TOP MANAGEMENT		Guy Kawasaki, founder, CEO, and chairman; Bill Reichert, president
	DESCRIPTION		Helps seed- and early-stage technology companies raise funding from a qualified pool of venture capital firms, angel investors, and corporations
	TRACK RECORD		Helped 40 startups raise more than $101 million in 1999
	SAMPLING OF INVESTOR MEMBERS		ETrade (Nasdaq: EGRP); Advanced Technology Ventures; Mayfield Fund; Ben Rosen, chairman of Compaq (NYSE: CPQ); Federico Faggin, CEO of Synaptics; and George Gilder, egghead and president of Gilder Technology Group
	NOTEWORTHY		In February, the company filed a registration statement with the Securities and Exchange Commission to go public. That same month, it raised $27 million from a lengthy list of top-tier investors, including Sequoia Capital, Goldman Sachs (NYSE: GS), and MSD Capital, Michael Dell's private investment firm.
	MR. REICHERT'S RESUME		Mr. Reichert spent five years as a consultant, doing stints at McKinsey&Co. as well as joining two ex-McKinsey alums to start their own consulting firm. He also cofounded five companies, one of which went public (Academic Systems) and one that was sold (New Venture Consultants). He also helped turn around The Learning Company. Not everything he touched turned to gold. He fell into the pen-based computing hoopla with Infa Technologies and got burned like everyone else.
	PERSONAL		The Chicago native is married with three kids. A closet curler, he was the "skip" of the "rink" that made it to the Illinois state junior championship final.