How much information should I share with the investor?

David Wu / November, 2017

Description

David Wu, General Partner at Maveron explains the balance of sharing too much or too little information with your investors.

Video Transcript

How much information should I share with the investor?

This is an interesting question and it has come up a couple of times lately. I think it really depends on the exact investor and the psychological contract an entrepreneur has with the investor. I think some commonalities, I’m big on the school of no surprises and you would definitely know that you don’t like to be blindsided by bad information. So I always encourage entrepreneurs to be over communicative early on about things if they are going the wrong direction, but at the same time you don’t want to give so much information, especially on a new gelling relationship that makes people unnecessarily worried.

I coach a lot of my entrepreneurs, get to know, is your investor or your board member an ex-operator that really understands granular and wants to work in transit with you, or somebody that really is more of a finance person that just really want to know is this company on the right track or not so you got to figure out who they are. Then you also have to build the right psychological contract, so people can understand the nuances of the information you’re giving them. But in general, you know, get to know the person and figure out, are there material changes to the business and communicate those early.

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