Transparency at the expense of ‘looking good’?

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By Ted Liu

At CPE Media, our job and mission are to be a historian that truly documents fundraising by Canadian entrepreneurs. Private funding information is generally hard to obtain as it is “private”; we have been successful in capturing information as accurate as possible, with verification from investors directly or from vast sources of information we could rely on. Our wealth of research experience, close to 26 years, plays an integral part as well.

Most of the Canadian companies are announcing their fundraising news in a timely and honest fashion, which makes our job easier. However, we do encounter companies that were not truthful, and worse with the consent of their backers, just for the sake of “looking good.”

US venture capital funded companies, in general, tend to announce their funding news quickly, so the companies could move on and focus on their real job at hands.

Some companies made their announcements two to three months late, either they were in stealth modes and not ready to be noticed, or they were micro-managing for the sake of “maximum public relation (PR).”

We had been accused by some company founders of lying about their fundraising. To those company founders, in most cases, we did not even know your company existing until we came across your fundraising from our research.

Our advice to company founders is that tell the world about your funding right away. Celebrate your achievement or milestone with family and friends, and mostly with your employees. Your real job has just begun – focusing and growing your company. At the end of the day, manufactured “looking good” does not help a bit in growing your company. PR will take care of itself.

Then we have the overstatements of fundraising by some companies. Shares issued as part of acquisition do not constitute fundraising; secondary purchases do not account as fundraising. As a small market as Canada is, overstatement has the dramatic effect of inflating overall Canadian market activities. This bothers us and should trouble you if you are a policymaker.

We are hoping our “rants” will strike a chord with you, Canadian startup founders. Integrity and truthfulness do pay, no matter what stage you are in. Also in your urgent search for funding, do yourself a big favour – do due diligence on your potential investors.

photo credit: SplitShire via pixabay