Don't Let Good Friends Hear About It On TechCrunch

A few weeks ago, we were getting ready to close on an investment. I asked one of my partners when the news of the financing would be announced. He said, "pretty much right away." And I said, "we had better let our friends who run XYZ company know." My partner said, "absolutely, can you compose an email we can send together?"

This has been our mantra for a while now. We have a lot of friends in the startup world, entrepreneurs, VCs, management team members, and it is quite often that we are involved in a transaction, a financing, a sale, a merger, that might impact them and their interests. We don't want them to read about it on TechCrunch. We want them to hear about it from us first.

You'd be surprised how much goodwill this practice creates. Nobody is happy hearing that you just funded a competitor of theirs, or something similar, but when they get an advanced warning from you along with an explanation of your thinking behind the move, it goes a long way. They aren't caught off guard and they can process the information calmly. It doesn't mean they will be happy about the news. But it does mean that your relationship with them will be preserved (in most cases).

Doing this is tricky. Investors have an obligation to keep information they have confidential until the subject company decides to disclose/announce. So you have to time the tipoff of your friends carefully. We typically wait until the day of the announcement or at the earliest the evening before. In many cases we will clear the tipoff with the subject company as well. A lot depends on the people and relationships involved on all sides.

Relationships and reputation are the currency of business. I do not believe you can be successful in business without both. So preserving them is critical. And one good way to do that is to make sure good friends don't hear about things that are important to them on TechCrunch.

#VC & Technology

Comments (Archived):

  1. Donna Brewington White

    “Relationships and reputation are the currency of business.”Interesting how this is true no matter what business you are in.  Perhaps, there is an exception.  I can’t think of one.

    1. fredwilson

      donna coming in with the first comment! usually you are here later in the day, right?

      1. Donna Brewington White

        Right.  Much later.  Don’t get this opportunity very often as a West Coaster — but the question is — is this the end of my day or the beginning. I won’t tell. ;-)Either way, I’m going to regret this later today when I’m trying to keep up with my kids at Disneyland.

        1. Mark Essel

          Enjoy the day 🙂

          1. Donna Brewington White

            Thanks, Mark.  Did!!!

        2. Matt A. Myers

          Donna pulled an all-nighter!

          1. Donna Brewington White

            Maaaaaybee.  Maybe not. ;-)Although, the combination of working full-time during my undergrad (in a REAL job), having four newborns in six years, starting a business (in conjunction with the former) and having startups as clients has wrecked my sleep pattern.

        3. fredwilson

          i’ve done that family trip a few times. it is exhausting but the kids love it like nothing else.

          1. Donna Brewington White

            Exhausting for sure, but my 13 y.o. (whose birthday we were celebrating) said that it was the best day of his life!  Doesn’t get much better.  

      2. daryn

        Wow Fred, you even know when your regulars show up? You really are the bartender!

        1. kirklove


          1. daryn

            haha 🙂

          2. daveschappell

            Fred is most definitely Sam… now Daryn could be Norm, and that’s a compliment 🙂

        2. Matt A. Myers

          That would be a cool statistics dashboard for Disqus if Fred’s not already using one… See when your regulars show up + know maybe best time to post or be on for responses, etc.. Not sure all of the uses. 🙂 Freebie for Disqus.. 😛

          1. Donna Brewington White

            Or we could just do roll call.

        3. fredwilson

          there was a reason i asked for that tag

        4. Donna Brewington White

          And he knows our names.  And seemingly always glad we came.

    2. Aaron Klein

      There just isn’t an exception to that rule…

  2. Dave Pinsen

    Seems like a combination of common sense and tact. Are those attributes uncommon elsewhere in the venture capital business?

    1. fredwilson

      not common enough

  3. Chris G. Shaw

    Empathy is a common sense skill that seems to be lacking in many places in business and government right now. Nice to hear there are some that still trade in that currency. :-). 

    1. fredwilson

      when i do the meyers briggs style personality tests, i score very low on empathy. i need to work on that

      1. awaldstein

        Honest, responsible communications driven by understanding is pretty close to empathy in my book. .

      2. Mark Essel

        Each persona is a blend of priorities. Empathy may not serve you as well in your line of work. I wonder how other investors rate on the test, and how your empathy ranks in that cluster.

        1. Matt A. Myers

          It’s really just a question of how stuck in logic you are, versus ability to flow between logic with feeling. Everyone has the capable to be empathetic – but for many men it’s not nurtered, and emotions and crying, etc. are seen as “not strong” etc..

      3. Cam MacRae

        Everything I’ve read on the MBTI states that it is neither stable nor reliable so I don’t think I’d let it inform my life choices. Besides, there’s a case to be made that you should build your strengths and surround yourself with others whose strength lies where you are weak. Growth by osmosis, perhaps?

        1. ShanaC

          Better question – why is this form of personality so unstable?

          1. Cam MacRae

            I think that would make a good koan.

      4. JamesHRH

        I really like Chris’ comment re: empathy as a skill. It is part of the mix in dealing with people appropriately. It is not often referred to as a skill, but it can be learned for those people that don’t have it naturally, in spades (how many high empathy MIT grads are there, really ? 😛 )Have you ever heard of or been exposed to the Enneagram system? A MB black belt friend of mine (when I told her I was using it all the time) described it as faster, more flexible and 80% as effective.I have certainly found it to be just that. I was introduced to it through a book – I use – there are several flavours.

        1. fredwilson

          thanks. i will check it out

          1. JamesHRH

            What did you think?

      5. Matt A. Myers

        How do you score on logic though.. and knowing how someone will react? The empathy is in you, I hope.. perhaps just some defence mechanisms up that you can likely safely release now, but needed them at some point. 🙂

        1. fredwilson

          high on logic. always have. that’s been my overdeveloped muscle. the people skills do not come easily to me and i’ve been fortunate to work with people over the years who have helped me a lot in that area.

    2. Guest

      Sent you a Tweet on this as well Chris   ” Empathy is a common sense skill ” Very nicely done.



  4. Eric

    Fred,I think this “let them know first” philosophy applies across a very broad spactrum.  Communicating bad news to the board, when choosing a partner or service provider over another, when letting an employee go and on and on…I think what you are doing ultimately shows respect, and respect given earns more of the same.  As to the company you are financing — Let’s be honest — their doing cartwheels at the very thought of your investment. 🙂

    1. fredwilson

      great point about being quick to share bad news

    2. Charlie C

      bad news should travel fast. 

      1. testtest


  5. Barry Nolan

    “Relationships and reputation are the currency of business.” Great quote.

    1. andyidsinga

      along side the other currency of business …currency 😉

      1. fredwilson

        money doesn’t hold a candle to reputation and relationshipsit’s way too easy to get a hold of money, particularly other people’s money

        1. andyidsinga

          agreed …was just trying to be silly ( sorry, bad joke )

  6. andyswan

    The best way to go behind someone’s back is to do it in front of their face.

    1. fredwilson

      love that!!!!

    2. Donna Brewington White

      How do you come up with these so early in the morning?

      1. andyswan

        Old Peruvian smoothie recipe and 27 minutes of intense weight lifting.

    3. Matt A. Myers

      I like, but dislike that?

      1. andyswan

        I’ll take that as a yes.

        1. Matt A. Myers

          I’m not sure if I should 🙂 or 🙁

    4. Mark Essel

      That’s gotta be awkward for anyone but owl-people.

      1. andyswan

        You’ve obviously never been to Vegas

      2. falicon

        or beetlejuice (… )

    5. K_Berger


  7. Carl J. Mistlebauer

    “Relationships and reputation are the currency of business….”I think this actually goes way beyond “good friends.”  The reality is that with the internet, email, and cell phones we have dramatically increased our circle of people we communicate with but we have become less “communicative.”I read an article the other day about how if you send resumes to companies via the internet do not anticipate a response; that the company is dealing with hundreds of applicants.  If someone  sends you a resume or an email then you should respond.  If you find yourself overwhelmed then cut back on the channels that you use to solicit resumes from.I have been to quite a few trade shows and I have watched others kick smaller retailers to the curb when a major department store buyer walks into the booth.Some of the best relationships I have in business started from the fact that I took the time to tell a vendor why I did not go with them; the really good ones came back later and made me an offer I could not refuse!  You never really know who will be important to you in the future, but you build your future today so try not to burn too many bridges in your effort to be successful.

    1. Cam MacRae

      It works the other way too – some of my best relationships started because I took the time to hear from the customer why we didn’t win their business, and to try and understand deeply. Aside from coming as a complete shock to them, it avoids pointless internal conjecture about what is or isn’t wrong with your product.

    2. fredwilson

      face to face becomes more important as people have other ways to communicate

  8. testtest

    “Relationships and reputation are the currency of business”It’s the currency of my favorite websites. Of society. People have died for both. And clicked the back button.  

    1. fredwilson

      i don’t get the “clicked the back button” part

      1. testtest

        I stay on Amazon because I have a relationship with them. It’s been built with each order, each recommendation, and each time they remember my details.I stay on twitter because of the relationships.I give a website a chance if it has a good reputation. I’m more likely to discover a website with a good reputation in Search, it has more links.It’s the anit-back button. I don’t click the back button on these websites. I move forward. I move forward with them in time, and I move forward to them from Search.

        1. fredwilson

          ah, got it nowthanks

  9. RichardF

    I can feel a Techcrunch response à la  Caterina Fake coming…..

    1. William Mougayar

      I don’t think Fred implied to not share with TechCrunch (or other pubs for that matter). Point is share first with a close circle so they’re not surprised negatively. Then share with the world at large. Generally, you do need the TC & others to know about this. 

    2. Donna Brewington White

      Hadn’t seen that post by Arrington (thanks for the link @daveinhackensack:disqus ) Although a much different situation, I’ve been mulling over something all morning — trying to decide whether to set a certain record straight.  Wondering if it would have any value to anyone except me — to help me feel vindicated.  I think I found my answer. Think I’ll go “big” on this one now that I’ve seen what the contrast looks like.  Thanks, Richard.

      1. RichardF

        As my Dad say’s “if you can’t say anything nice about someone don’t say anything at all”I’m a big believer in karma, what comes around goes around.  So whoever it is will get their comeuppance Donna. It might be worth writing the post and then not posting it, that can be cathartic.  I haven’t been a fan of TechGrudge for a while but Arrington’s post was the last straw for me.  Om Malik usually covers anything that they cover with far less bias and without the acridity.

  10. Pascal-Emmanuel Gobry

    …Or Business Insider. 😉

    1. Aaron Klein

      Business Insider has broken a few great stories…have enjoyed your pieces there.

  11. Jon Atrides

    Great post. Good communication in business is paramount. It’s all about taking those extra five minutes to step into the shoes of the other side and show some courtesy. I’ve seen good work suffer because it was delivered with no context/explanation.

    1. fredwilson

      stepping into the other person’s shoes is so key in business

  12. William Mougayar

    I can imagine that email starting with “We wanted you to be the first to know about ….and here’s why…” But have you ever suspected a disgruntled friend leaking the news earlier than necessary? Your practices are exemplary. I’ve seen another VC not even having the same courtesy turning down a deal. Why do some VCs go silent or let someone on their staff tell you the bad news instead of being upfront and saying it. Not a good sign for the startup, but not a good sign about their character mostly.

    1. Matt A. Myers

      It’s mainly about owning up to responsibility, and usually feelings of guilt would be the base cause of resistance in this case.

    2. fredwilson

      yes, i worry about the leak. that’s why timing is key.

  13. matthughes

    Coming from someone who was recently let down in a big way (unceremoniously) by a trusted business partner, this is terrific advice. 

    1. fredwilson

      sorry to hear that matthew

      1. matthughes

        Appreciate that.Definitely a that’s the way the digital cookie crumbles situation.In hindsight I’m much better off now.Funny how that works.(great post topic that hit home)

  14. Scott Barnett

    Character is doing the right thing when nobody’s looking.  Of course, now you’ve let us take a look… 🙂

    1. fredwilson


  15. Rohan

    I guess it is also about keeping business personal. The famous ‘It’s not personal. It’s just business’ line doesn’t quite work I guess. Also reminds me of a close relative of mine, a restaurateur, who still writes pay-checks out and gives it to his employees/mails it out every week (the food business is a weekly wage business) instead of the customary bank transfers in his attempt to keep a personal connection, keep it personal. 

    1. fredwilson

      i had a partner in a different VC firm who used that line all the time. it is bullshit. business is personal for me.

      1. Rohan

        I can’t imagine any other option in this day and age. I blogged about it on -…Thanks to social media, all our lives are up for viewing more than ever before and inconsistencies in our behavior are going to show.

  16. Valid

    Oh please, your VC’s aren’t your friends. 90% of them would gut you and use your intestines for sausage if given half the chance.P.S. Your dog doesn’t love you, it loves being fed. 

    1. Matt A. Myers

      If they potentially have something to lose and still need your trust then they won’t – but I see that as the only case, as is the way with all business; Terrible for the soul, but not everyone is soulless nor lack empathy, so some do try to minimize the hurt.

    2. RichardF

      mine does, he told me so.

    3. fredwilson

      there are plenty of high integrity decent people in the VC business. you just have to work to find them.

    4. Aaron Klein

      I’m sure there are plenty of VCs who still act that way but the ones who did in the 90s are largely out of business. That kind of behavior isn’t good for long term survival. People talk.

  17. leeschneider

    Loving the new (I think) disqus tags: Bartender (Fred), Top 10, Top 50, Top 100.  Like that it let’s you know who is a regular.

    1. fredwilson

      but i want to change the names for “top 10”, “top 50”, “top 100” to bar themed names

      1. Donna Brewington White

        Who gets to be bouncers?  Or is that Kid’s domain?

      2. RichardF

        well we know who the pappymeister is going to be

  18. Ryan

    If a portfolio company asked you not to participate in a round because of one reason or another, would their request have any impact on your decision to participate?

    1. fredwilson

      yes. and it happens more than you might think

      1. Joe Charakupa

        So would that mean you also disclose to the portfolio prior to participating in a round or would this only come about if they heard something in the grapevine?

        1. fredwilson

          before, but we have to manage this conversation very carefully for obvious reasons

  19. Shawn Cohen

    This is similar to a family lesson we just encountered. We recently had to ensure that my aunt found out about my niece’s birth over the phone and not on Facebook.Definitely a parallel principle you write about here in the business world. Thanks, Fred.

    1. fredwilson

      facebook is a game changer for families and friends in this regardi found out about my daughter’s bungie jump by seeing this (attached) at the top of my fb news feed

  20. Brad

    The best way to find out who is a true partner is to have the message come from them directly. Like I tell my kids, bad news is not bad, except when handled poorly.

    1. fredwilson

      great line

  21. Gregg Freishtat

    Another reason so many folks consider you all “one of the good guys”….

    1. fredwilson

      hi Gregg. how’s everything?

  22. K_Berger

    This is the kind of thing that everyone knows you should do, but many people don’t actually take the time to do it.  It’s not the thought that counts, it’s actually making the effort. 

    1. fredwilson

      “i thought about giving you advance notice ken””yeah sure buddy”

  23. aminTorres

    Sharing this also goes long ways In my view.These kinds of entries here at AVC is in part what makes you/USV so desirable to partner with among entrepreneurs.

    1. fredwilson

      well you gotta do what you say. so writing it also forces us to be diligent in doing it.

  24. daryn

    You guys really are top shelf. That you think about this, and that you follow through with it despite the trickiness, is really a testament to USV’s character. It doesn’t just preserve your relationships and reputation, it strengthens them.

    1. daveschappell

      Indeed, I’m quite sure they very much appreciated it 🙂

      1. fredwilson

        you guys are too kind

  25. Steven Yevoli

    Well expressed post. The challenge is that in today’s world, the ability to communicate and be “heard” by many is easier than ever making it hard to control “leaks”.  It seems almost ironic that we preserve “good news” and attempt to time its distribution whereas “bad news” seems to have little to no schedule. 

    1. fredwilson

      controlling leaks is almost impossible in this day and age. but we have done it many times. it is all about trust.

  26. Matt Cordova

    My favorite version of this is when I leave a VC’s office at 7pm then have a meeting with a different one the next day at 10am and the first VC was kind enough to call around the valley and talk to the 2nd one telling him all about my deal and what I said prior to walking into the 2nd meeting and the 2nd VC tells me all about it. Really enjoy that level of communication the VC community has 😉

    1. fredwilson

      very valid concern. there is a way to do this too. VCs can and should talk and compare notes. it is part of our due diligence process. but we should do it quietly and discreetly. the startup world is not a soap opera 

      1. Matt Cordova

        This conversation was pretty comical it started off like this:”we try to differentiate ourselves from other vc’s. We aren’t pretentious that’s why we don’t have offices on sand hill like the other guys. We don’t think money is well spent paying 4x for office space with our limited partners money”I passed by sand hill last week and saw their office is now located there.Next…him: “We have very high standards; truth be told we passed on Google when they were shopping their deal around at the beginning”me: “you’re trying to brag about passing on Google? that’s like saying you didn’t want to make your fund and become a billionaire”him:”No, no I was just saying that we have high standards”me: “right.”I just looked at their website and i’m glad to see he is no longer there adding (negative) value to the firm.

        1. fredwilson


  27. Holger Luedorf

    I would recommend this as a practice for any start-up.  We follow this mantra with strategic partners at @foursquare:disqus  as well.  Giving critical partners a heads-up regarding key announcements (even if it is just a day early), especially as they touch competitive products is critical and goes a long way.  This way partner interfaces can manage those messaging internally and thereby avoid surprised executives being caught off-guard.This is a key component of what building trusted partnerships is all about.

    1. fredwilson

      love the photo embed holgerand your comment explains why you are so good at what you do

  28. MG Siegler

    I’d prefer they read it first on TechCrunch, but maybe I’m biased.

    1. Ryan

      Is TechCrunch some type of new cereal? Never heard of it.

      1. Vasudev Ram

        Yes, it techs some crunching to digest it.

        1. Donna Brewington White

          Ha!  That’s good.

    2. William Mougayar

      How about they all read it on TechCrunch after the VC informs their close friends first?

    3. fredwilson

      happens too often in my opinion MG!

    4. fredwilson

      damn is it nice to be talking to you on disqus again.i have boycotted the comments on TC since the day you moved oni used to comment on TC every couple days in the good old daysand i will never comment on a FB thread anywhere on the web, including TCi know that doesn’t matter to you guysbut it does matter to me

      1. MG Siegler

        heh. as always, we’re discussing and weighing options for commenting. we’ll see.

  29. sudkish

    You bring up an important point that goes beyond business relationships to personal relationships “Don’t let good friends hear about it on Facebook (via new feed)”

    1. fredwilson

      yes!!!!  i tell that to my kids all the time. like when a guy finds out his girlfriend broke up with him because she changed her status on FB to single. that shit happens. and i don’t want my kids to behave that way. parents need to be hip to this stuff. kids need to learn how to behave online as well as offline.

  30. hypermark

    Maybe, it’s a bit orthogonal to your point, but in matters like these, I always think back to the axiom that “If you want to see how it ends, look at how it begins.”In other words, advanced communication in events like these sets a protocol for going forward expectations. Namely, that we’ll be clear, direct and to your face. When your display basic courtesy and respect in seemingly small areas like these, it buys a lot of quid pro quo when the tables are turned. What you sow is what you reap.

    1. fredwilson

      being clear and direct is so important. totally agree

  31. Erick Schonfeld

    We’ll take that as a challenge to break more startup news on TechCrunch 🙂

    1. fredwilson

      and we will take that as a challenge to keep more startup news private until it should not be

  32. ShanaC

    Do Unto Others as you would have done to you – as the saying goes…

    1. Guest

      That is a great turn of phrase here Shana.In that same spirit might I add that some of the best journeys I have ever taken were when I happen to be wearing someone else’s shoes.

    2. fredwilson

      yes, that is one of the many things my mom taught me. it’s a particularly good mantra for life

    3. loupaglia

      not to be confused with “do to them what they would do to me”

  33. KenHoinsky

    Excellent post, Fred.I did this when I sold my company (MX Media) to Crunchyroll was seen as a major disruptive threat and competitor to many of my existing clients. I traveled around the country and told each one of my clients, face-to-face, what I was doing and my rationale for doing so. It allowed us to continue to stay on good terms even as business may have suffered due to the sale.

    1. fredwilson

      wow. that is a great story. well done.

  34. Carl J. Mistlebauer

    Well, I read the link that Dave provided,…, and all I have to say, is what a pathetic cat fight!Being totally out in left field in regards to this industry, all I can say is that you all need to keep that type of dirty laundry hidden….Whew!



    1. andyidsinga

      what is this techlunch thing anyhow ?

    2. fredwilson

      i do read TC. at least they have an attitude. so many of the tech blogs out there put me to sleep



  36. paramendra

    (in most cases)Ha! You obviously have some horror stories. 🙂 This post reminds me of the Arrington rant on Fake.

    1. fredwilson

      he hurt himself with me on that one. i like mike. he’s badass. but that was wrong.

  37. CourtneyBoydMyers

    But what about on The Next Web? 😉

  38. David Gadarian

    Hi Fred.  New to comment here, but yes this is great advice.  I can remember back when I was in another business, (TV) I got to read on Deadline Hollywood that a network I had just produced a pilot for picked up a competing project.  Needless to say I was quite upset to learn in this manner that my show was dead.  Despite having produced a pilot for them, they were never on my first to call list following that.  

    1. Donna Brewington White

      BTW, not “liking” what that network did to you, but “liking” that you commented.

      1. David Gadarian

        Thanks Donna.  That was one of my less good days…

  39. RichardF

    couldn’t agree more Charlie

  40. Dave Pinsen

    Link?. You were referring to this, “Why We Often Blindside Companies”?