« What Is The One Common Element You’ve Seen In Successful VC’s? | Litigation Sucks »

Should You Exaggerate Your Size?

Q: Is it wise as a small company (1 person + advisors) to give the perception of a larger company?  I had done this for a while when I presented at conferences and talked to VC’s and have since stopped.  I have to bite my tongue when people tell me “we’re amazed that you’re able to do this with a team of 5″, when in reality I done most of it myself.  The team of 5 was just to make the company look larger than we really are.

A: (Brad) As with most things in life, it’s not useful to exaggerate.  You’ll eventually be found out and it’s usually awkward (sometimes more awkward than others.)  In this specific case, you are doing yourself a great disservice.  I think most VCs will be much more impressed with what you’ve accomplished when they hear that it has been done by just you! 

Given that you are talking to VCs, I assume you are raising money.  In addition to undermining your accomplishments, you are breaking a cardinal rule of any new relationship – don’t lie.  Once a prospective investor learns you have lied about the number of people in your company, everything you say that doesn’t sound quite right will be suspect.  By doing a small think like exaggerating the size of your company, you set yourself up not to be trusted.  Since trust is a key part of the relationship you want to develop with a prospective funder, you’ve now created a very ineffective dynamic.

You can also look at this from the reverse perspective.  If your prospective VC can’t get excited about what you have accomplished on your own, why would you want to develop a relationship with him?

November 6th, 2007 by     Categories: Fundraising