Today’s Pill (1): The Elephant in the Room

“The elephant in the room” is about saying the truth on what everyone sees but is afraid to talk about; and how you say it is equally important. In this case, the two founders were eager to sign the first financing term sheet, having a (false) “if you get a term, take it” approach, so I told them the truth because it was the right thing to do, and, to be frank, I was not afraid if they stopped me being their coach due to not wanting to hear the truth. And since it’s all about communication, and, as Victor (@VictorCheng), the strategic advisor, clarifies in a recent post, every conversation occurs at two levels, idea and power, I turned the discussion to “keep it simple, as everything you do becomes a precedent for the future” and made them understand the importance of the economics and control terms in the other term sheet and for their venture. In the end, the founders understood the reasoning behind and got the seed (from the one with simpler, but widespread terms; and no participating preferred.)