My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Pitching Investors

The Bright Side of Sharing Bad News With Potential Investors

Magazine Contributor
Entrepreneur Contributor
1 min read

This story appears in the March 2016 issue of Entrepreneur. Subscribe »

Q: How do I tell all without scaring potential investors? 

A: It’s a critical balancing act, but remember: Investors want to hear everything. Kevin Choquette, founder of San Diego’s Fident Capital, who’s been on both sides of this discussion, offers three critical steps:

1. Don’t whitewash. Most entrepreneurs want to coddle potential investors, Choquette says, but that’s foolish: Everything will come out in due time anyway, so it’s better if it happens early. “Be honest about the magnitude of the challenge,” he says. 

2. Identify the challenges ahead. It might be your ability to recruit the right talent. It might be the general condition of the capital market. Whatever it is, Choquette says, lay it out. That way, prospective partners are prepared for what’s next. 

3. Say how you’ll meet the challenges. Tout your team’s strengths. If you have a solid entrepreneurial track rec­ord, talk it up. Do you have a proven ally in R&D? In distribution? In marketing? “Show them your previous experience in building an A team,” Choquette says.  

More from Entrepreneur

Jon Horowitz is dedicated to helping brands with grow their social footprint by aligning with influencers and creating innovative content.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Starting, buying, or growing your small business shouldn’t be hard. Guidant Financial works to make financing easy for current and aspiring small business owners by providing custom funding solutions, financing education, and more.

Latest on Entrepreneur