[Editor's note: Francisco Dao has been one of our most popular guest contributors on PandoDaily, and I'm thrilled to announce that starting today he will be a regular weekly columnist. Francisco is the founder of 50Kings and a former columnist for Inc.com. He has also contributed to the Washington Post, VentureBeat, The Conference Board, and FastCompany.com. Look for his take-no-prisoners sharp industry analysis here every Tuesday.]

Mark Twain was so beguiled by the way statistics could be manipulated to support even the weakest arguments that he wrote, “There are three kinds of lies: lies, damned lies, and statistics.” These days, at least in the world of raising capital, “statistics” have apparently been replaced by the pitch decks being presented to VCs.

I can’t say for sure how widespread this is, but several entrepreneurs I know recently had the “opportunity” to work with a Silicon Valley player well known for his business development acumen and ability to raise money. I put the word “opportunity” in quotes because the core piece of advice he gave them was “Lie! Just make it up. The VCs are expecting you to lie.” The experience left them feeling so dirty that one of them swears he’ll never raise capital again. And the saddest part of it all? It worked.

My questions for the venture capitalists reading this is: Do you really assume everyone is lying about their projections? Is this executive right in telling entrepreneurs to fabricate inflated numbers because that’s what you expect? If this is the lens through which you view entrepreneurs, then don’t you realize that you are penalizing the honest ones while rewarding the liars who sell you a fantasy? And if you’re not assuming pitches are based on lies, how then has this man become so successful at taking your money?

I realize my evidence is anecdotal, and it certainly isn’t strong enough to indict the entire venture capital community. But the executive in question enjoys such a strong reputation and high profile that I think it’s reasonable to assume his advice is appropriate for at least a fair number of VCs. This is extraordinarily disappointing on many levels. For an industry that claims to champion entrepreneurs, isn’t it disingenuous to equate their integrity with those of used car salesmen?

VCs may blame entrepreneurs and say they have simply adjusted to inflated presentations, but debating the chicken or the egg argument won’t change the fact that we are now operating in an environment where dishonesty is not just the standard practice but apparently the most effective practice. By rewarding deception and assuming entrepreneurs are liars, venture capitalists who operate under this premise are forcing honest men (and women) to debase themselves to the lowest common denominator, to abandon idealism in favor of painting a false perception.

Many people reading this will dismiss me as naive and say I’m making much ado about nothing. Lying can easily be explained away as unintentionally “optimistic projections.” Psychologists have produced a wealth of data showing that almost all of us have an inflated sense of self perception, and in the idealistic world inhabited by entrepreneurs, the line between confidence and delusion is often blurry. But these explanations don’t apply. The entrepreneurs I spoke with knew they were being advised to lie and there was no mistaking the directive.

Knowing that deception has become an accepted part of raising capital fills me with anger and sadness, because I’ve always believed that entrepreneurship was a noble endeavor, something pursued by idealists more interested in changing the world than making a fast buck.

For most of us, the entrepreneurial path is filled with naysayers who tell us we’re crazy for tilting at windmills. I’ve always believed it is an entrepreneur’s integrity that keeps him moving forward, keeps him focused, and keeps him believing when nobody else does. The truest entrepreneurs have an uncompromising dedication not only to themselves but to their vision and to what was possible. This integrity is part of what we admire about them.

But apparently, compromising integrity is what it takes to get a check these days on Sand Hill Road.