Yeah, we wouldn't steal this book if we were you

Founders and venture capitalists may be meh on the value of a college education. But surely they have to appreciate the organization that goes into organized crime. After running his own crew as a Gambino family associate--and an eight-year stint in prison--Louis Ferrante turned from mafioso to motivational speaker. Now that his latest book, Mob Rules, has been released, peHUB's Connie Loizos asked Mr. Ferrante how the advice therein might apply to start-up founders and VCs.

Is your partner at a VC constantly trying to one-up you? Mr. Ferrante suggests spending more time with them and trusting your instincts to figure if they're going to rat you out. "You can also ask his neighbors, if you really want to know somebody," he added with a laugh.

Mr. Ferrante advised VCs to only fund people that have been vouched. On the flipside, entrepreneurs seeking funding should "appeal to people’s specific interests." For example, he told peHUB:

If you want to open a nightclub and you know someone who wants to be Don Cheech and he’s dating 25-year-olds, chances are he’s going to listen to you.

Sounds just like going to John Doerr with a "social commerce" idea to us. But what about the optics of founder's placing a mole at competing start-ups?

It looks underhanded, but it’s not. Look, it’s a competitive world, and the best tips I had came from inside guys  . . .

If you’re just willing to listen to people, you can glean a lot of information without having to pointedly ask: ‘Give me the dirt.’ Just go hang out with somebody and listen. Everyone is willing to talk if you’re friendly, especially if you’re in a similar business. They want to be your friend, and they’ll tell you stuff, and that inside information can be crucial, like: ‘This is the rock-bottom number our company will take.’

Every company would do it back to you if they could.

Sincerely, Sibling Rivalry

Dear Sibling,

You are truly amazing. For years now I have been trying to come up with a perfect definition of why venture capital money sucks. Congratulations you nailed it. It reminds me of a story my friend Jacques once told me about a banker.

So the first French guy, Maurice, is spending another sleepless night worrying about the money he owes to his banker neighbor, Pierre. Many restless weeks pass until one night Maurice yells over to his next door banker (who is as usual sleeping soundly), "Pierre, wake up." A sleepy Pierre comes to the window very angry and says, "Maurice why did you wake me up from a sound sleep?" Maurice then says, "I am not going to pay you back your money." Then he goes back to bed and has the deepest sleep of his life. Pierre, of course, goes back to bed and tosses and turns the night away...

There are no morals to this story just as there are no morals to venture capital bankers. These girls only care about two things: making as much money as they can as fast as they can (post-modern strip miners) and not investing in irrational players. On the face of it you would think that a losing investment matters to them most, this is a venture capital fallacy, but these ladies are essentially legitimized gamblers playing the odds, they understand that every bet doesn't pay off, the game is really a spread of good percentage bets. What makes these gals lose sleep is when they, and the venture community, find out that the CEO does cocaine, steals money, abuses employees, (in that order).

As for the vultures investing in your competitor, it could mean anything. They might be thinking eventual merger, maybe they like the space and they want to cover their bets (venture roulette), or possibly they like the space but think you suck, who knows. Remember once you take their money you bought yourself membership into the VC mafia and you have agreed to kiss the ring.

Bottom line, run the business using your own good judgement and do not let the devils (vultures, pricks, etc.) drive the business. If they want to, or have the power to, relieve you of command, so be it. This does not mean that you stop listening to them, they are your business partners after all, and they might just make you really rich. But you should always keep in mind what any good seaman knows: there is only one captain to a ship.

Josh Harris is the founder of JupiterResearch and Pseudo.com and the ceo of The Wired City, a web tv network in New York.

Need some advice? Email Josh at askjoshharris at gmail dot com.