How much should I share with my employees about our fundraising process/progress?

When you work in a startup, you aren’t a moron. You know that you aren’t profitable so live off the proverbial investor teet. If the CEO doesn’t close new funding you’re all out on your rear.

Staff wants to know if they are going to have a job in a few months.

So put yourself in their position. What would you want to know? Would you want to be kept in the dark?

Of course not!

When you are about to start raising, you should have a town hall and tell everyone that you’re about to start raising and it will be time-intensive. You really need their support to keep the shop going as you hit the road. They will need to step up etc (make them feel needed and they are a part of the process). You need to let people know who will take on your responsibilities etc.

Now staff know you’re raising and are going to focus on it to make it happen.

In future town halls, you can have a little segment at the end to give an update. Tell them you’ve talked to a lot of investors, that it’s challenging but you’re making progress. If they know any investors you should talk to they should come to you and let them know.

When you come back from a meeting, you can let those near your deck know how the meeting went. Everyone thinks that fundraising is glamorous, so sharing how hard the questions were will be interesting to them. You can share the questions you were asked, even ask their opinion on how to answer better? It can be a quick 5 minutes, but staff will appreciate it.

If you’re close to closing, let people know that you’ve got a potential offer and are optimistic about it happening, but the deal isn’t closed till the money is in the bank.

You want to act like you aren’t hiding things from people. If you are taking a long time, it’s better to be honest(ish) as they will assume the worst and go looking for a job.

Having said that, staff likely know nothing about raising. They don’t care about details like liquidation preferences, so you don’t need to get into terms with them. They just want to know you’re doing your job and are going to get the deal done.

If you are struggling to raise, then it’s also good to have a town hall and communicate that you might need to start finding ways to save money. Ask them for their input. They don’t want to feel like things are just happening to them without a say.

There’s no reason you can’t ask for feedback about your pitch deck from some staff. It’s not like you know everything, right!?

Ultimately staff just want to eat the cake, they don’t want to know how it is being made. But if you might be late to the wedding, the bride wants an update when it will turn up.

I would say that what and how you share depends on the size of your company. You would likely never say anything in a 100+ company.

One company I set up had only 3 people and we struggled to raise a few times. Eventually, we decided the junior (3rd person) should get in on absolutely everything. He was making a huge sacrifice, why shouldn’t he be in everything? He didn’t ask too many questions, but he appreciated it. It also didn’t make him any less committed. He kept his head down programming APIs.

One of the advantages of being proactively open is that you get to control the narrative. That can help you from being asked questions you might not want to answer.