Talking about fundraising with employees

It's always a good idea to be as open as you can with your employees -- fundraising should be no different. Of course, there is always sensitive information that is best left unsaid or at least not said too loudly.

The pros and cons for being fully open about your fundraising activities include:

Pros

• Employees feel connected to the company
• There are no surprises
• They know that management trusts them since fundraising information is sensitive
• They might even have suggestions and ideas for other funding sources

Cons

• Technical people sometimes don't understand why funding deals take so much time
• You get a lot of questions about what the deal may be like and when it will close
• The more nervous among your staff might freak out that money is running low

In terms of the deal, it's fine to give numbers but you don't have to be exact. Usually it's good enough to give a range.

There is no harm in telling your staff that you are the process of raising money and that it's not been closed yet. I would probably not tell the staff all of the terms. Terms can be confusing and as long as they trust your judgement, all they will care about is approximately how much you raised and that you got a good deal.

I would recommend honesty. Otherwise you can often have rumors circulating which hurts everyone's productivity. Also I've been at companies where people were a little too comfortable and didn't have a real sense of urgency when the funding realities indicated they should. I say be honest, you don't have to go into minutia detail but you want to generally be enthusiastic and optimistic while being realistic...a tough balance sometimes.

Good luck,

I think it depends on the culture you are trying to create. There's nothing morally wrong I think in adopting a "need to know" principle. You have to be true to what you implied, but there are some subjects that are going to have to remain confidential. This could be one.

The numbers should be OK. Trust people, and the gain should generally be greater than the problem it caused. The numbers are public information in some sense after some time any way - there are always more sources to leak the information than we thought, not just from employees.