I was talking with one investor late last year. Things were going pretty well in one direction with my company and I decided that it would be a good time to fund additional growth. Just before I closed the deal, however, some key relationships that I had been counting on fell through. Ever the optimist, it didn't cause me personally to doubt what I was doing and didn't think it was a big deal in the long term.
One thing that I think is true of technical people is that we are comfortable disclosing difficult things. We tend to view them as just bugs to work out and expect that everyone involved will have enough belief in the end goal to find workarounds to any challenges. So, perhaps naively, I told the investor what was going on and how I planned to proceed.
He (being a certain type of investor) took this as an opportunity to try to completely change the terms of the deal we had agreed upon. So, I ended the talks without taking any money.
I wondered for a few months afterwards if I had made the right decision in being so honest and came to the realization that some investors do expect you to only paint a rosy picture.
At the end of the day though, I realized that I don't to work with that kind of investor and, as things turned out, it was a very good thing to not take money from him. Since then, some unbelievably good things have happened and couldn't have taken place if I was tied to some investor in Japan who didn't believe in me.
So, the lesson for me was, be honest and be yourself. The people who believe in you as an entrepreneur will be there through the ups and downs. And the truth is a great way to weed out those of little faith.
This has been my experience in life as well. Doing the right thing, which may cost you in short-term gain, usually leads to long-term gain.
You had the opportunity to find out about this man's character that he wanted to take advantage of you. Better to find this out sooner rather than later.
One thing that I think is true of technical people is that we are comfortable disclosing difficult things. We tend to view them as just bugs to work out and expect that everyone involved will have enough belief in the end goal to find workarounds to any challenges. So, perhaps naively, I told the investor what was going on and how I planned to proceed.
He (being a certain type of investor) took this as an opportunity to try to completely change the terms of the deal we had agreed upon. So, I ended the talks without taking any money.
I wondered for a few months afterwards if I had made the right decision in being so honest and came to the realization that some investors do expect you to only paint a rosy picture.
At the end of the day though, I realized that I don't to work with that kind of investor and, as things turned out, it was a very good thing to not take money from him. Since then, some unbelievably good things have happened and couldn't have taken place if I was tied to some investor in Japan who didn't believe in me.
So, the lesson for me was, be honest and be yourself. The people who believe in you as an entrepreneur will be there through the ups and downs. And the truth is a great way to weed out those of little faith.