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"The people who are really good at acting formidable often solve this problem by giving investors the impression that while no investors have committed yet, sev

"The people who are really good at acting formidable often solve this problem by giving investors the impression that while no investors have committed yet, several are about to. This is arguably a permissible tactic. It's slightly dickish of investors to care more about who else is investing than any other aspect of your startup, and misleading them about how far along you are with other investors seems the complementary countermove. It's arguably an instance of scamming a scammer. But I don't recommend this approach to most founders, because most founders wouldn't be able to carry it off." - Trying to reconcile this with the earlier citation that truth telling is critical. This flies in the face of it and rationalizes this behavior by claiming it's dickish to ask? I don't think that's true and when did two dicks make a right? By the way the much better tactic to solve this problem is pick one or two investors and work with them to get them to commit and then have an honest answer for the others who'll fill out your round. I enjoy these essays overall but don't enjoy this common thread I see that confuses hustle and sleight of hand as being interchangeable.

pmarca 13y ago
Paul's stance on this form of bluffing being "arguably permissible" is dangerous -- if you try that with a VC and they find out you're bluffing, you're screwed, not just on that deal but with that VC for the rest of your career. VCs talk to one another about this more often than entrepreneurs think.
lnanek2 13y ago
Some of it is word play. E.g. investor y invites person x to an event and they chat, person x then says he is meeting with investor y, which can imply it was a face to face meeting with just them, which then implies more interest than exists. If they compliment the idea at all then person x goes around saying investor y likes it. There seem to be a lot of defenses against this already, though. If you say something vague involving another investor you often get asked to clarify or expound on that immediately. That then breaks it down flat out to lie or tell the truth.
larrys 13y ago
PG seems to be saying that the other side "drew first blood". Of course that is an assumption that because they ask a question they care. While I'm sure they probably do care (because it's a well known fact and human nature) asking doesn't prove that the answer matters to them. That said in business bluffing and telling lies in certain circumstances about certain things (especially negotiation with an adversary) is a given. There is a line that is walked and it is walked differently by different people according to what they feel comfortable with. After all if you were at a car dealer and asked them "are you selling me this car cheaper than to any other customer" how do you think they would answer? And if they asked you "tell me the price the other dealer quoted you" how would you answer? One thing I do know is that if you don't know how to be devious in business you will have problems. This is not to say you should be a thief lying all the time and ripping people off. But you need to have some common sense about what is done in a business transactions and what is generally considered acceptable. And how in some cases you could even be viewed negatively for being "to honest".

pmarca 13y ago

Paul's stance on this form of bluffing being "arguably permissible" is dangerous -- if you try that with a VC and they find out you're bluffing, you're screwed, not just on that deal but with that VC for the rest of your career. VCs talk to one another about this more often than entrepreneurs think.

lnanek2 13y ago

Some of it is word play. E.g. investor y invites person x to an event and they chat, person x then says he is meeting with investor y, which can imply it was a face to face meeting with just them, which then implies more interest than exists. If they compliment the idea at all then person x goes around saying investor y likes it. There seem to be a lot of defenses against this already, though. If you say something vague involving another investor you often get asked to clarify or expound on that immediately. That then breaks it down flat out to lie or tell the truth.

larrys 13y ago

PG seems to be saying that the other side "drew first blood". Of course that is an assumption that because they ask a question they care. While I'm sure they probably do care (because it's a well known fact and human nature) asking doesn't prove that the answer matters to them. That said in business bluffing and telling lies in certain circumstances about certain things (especially negotiation with an adversary) is a given. There is a line that is walked and it is walked differently by different people according to what they feel comfortable with. After all if you were at a car dealer and asked them "are you selling me this car cheaper than to any other customer" how do you think they would answer? And if they asked you "tell me the price the other dealer quoted you" how would you answer? One thing I do know is that if you don't know how to be devious in business you will have problems. This is not to say you should be a thief lying all the time and ripping people off. But you need to have some common sense about what is done in a business transactions and what is generally considered acceptable. And how in some cases you could even be viewed negatively for being "to honest".