The Fastest Way to Kill Your Fundraise
You're raising money. Founders Fund seems excited. Should you tell other VCs? Keith Rabois has a simple rule.
Never tell another investor someone is interested unless they've verbally offered you money. Not 'seemed excited.' Not 'took a second meeting.' Actually offered money.
I would never tell another investor someone is interested unless they've at least verbally offered you money.
The VC World Is a Small Town
Here's what founders forget. Every investor Rabois competes with is a friend. They text each other. They have dinner together. They compare notes.
If you lie about who's interested, they will find out. And when they do, you're not just losing one investor. You're losing all of them.
The investor world is very insular. It's a collegial industry. Almost every single person knows everybody else.
The Safe Move That Works Every Time
Smart founders don't name names. They say something like: 'I just got an offer from a top-tier fund.' They create urgency without lying.
This puts the investor on a shot clock. Time is scarce. They need to move fast or miss out. That's acceptable to almost everyone.
You can indicate you have other interest without saying who. You're not lying — you're being appropriately discrete.
Don't Bluff With a Weak Hand
Here's where founders get burned. They get an offer from a second-tier fund. Then they call a top-tier fund and pretend it's a major offer.
Rabois says he'll figure out who it is. And when he does, he thinks: I don't trust this founder. Game over.
Bluff with a weak hand and the best investors will never trust you.
Trust Is the Only Currency That Matters
Fundraising isn't poker. You're not trying to bluff your way to a deal. You're building relationships with people who will sit on your board for a decade.
One lie destroys years of trust. Play it straight. The right investors will respect it.
One lie can destroy your reputation with every investor in Silicon Valley.