Picture this. You’ve just been to a startup event or a founder meetup, perhaps you’ve been reading the updates in that online founders' community you’re in. Or, like most days, you’re telling another founder or investor about your startup. You feel a bit intimidated, a bit insecure and you’re comparing yourself against others.
Let me translate some of those conversations for you.
“Oh yeah, we’ve raised just under 5 mil to date.”
Translation: We've raised £3.2m (GBP, not dollars) so far from multiple investors over multiple rounds since inception.
“We’re about 60 people globally.”
Translation: We have a full-time team of 42, mostly in London, and five to ten freelancers who we use sometimes. We have one person who works in Lisbon.
“We’re at 1m ARR [annual recurring revenue] growing at 30% month-on-month.”
Translation: We had our first £80k revenue month because we grew 30%. We hope we can do it again.
“I exited for seven figures in fall last year.”
Translation: We sold what we could to our nearest competitor, it was more like an acquihire. Our investors got 0.7x their money back.
We’ve made incredible progress in the startup ecosystem to become more open, honest and vulnerable. Founders and investors talk more about mental health. There are active conversations and changes being made around access to funding for underrepresented founders.
But I’m tired of the lingering bravado and smoke and mirrors. Founders aren’t honest with each other, with media and with investors about their performance. It wrecks a founder’s credibility over time, it makes it harder for us all by adding to distrust of founders. And it’s exaggeration that creates toxic companies and situations where everyone — founder, employees and investors — suffer.
Investors get a lot of attention for bad behaviour, like that angel investor who hasn’t actually got any cash to invest and just wants to meet you to learn something for the business they run. Or the VC who doesn’t have any more money to invest but is saving face by taking the meeting.
Founders, though — I still see so much bullshit. I see vagaries. I see half-truths and in some cases, I see straight-up lies.
I get it. “Act bigger than you are”, “fake it until you make it”, “play the game” — I’ve done it too. I’ve reported revenue in dollars on a pitch deck. I’ve done some loose maths to convince myself my ARR is damn fine.
A half-truth isn’t just a half-truth to another founder or a VC you’re trying to impress, it’s a half-truth to yourself
I used to do this all the time because I was covering up for my broken startup and insecurities. With Sanctus though, I always played it straight. A team of 70 with 50 self-employed coaches, that’s the truth. Half-truths hurt me, half-truths cover up my insecurities. Exaggerations stunt my growth.
A half-truth isn’t just a half-truth to another founder or a VC you’re trying to impress, it’s a half-truth to yourself. You aren’t letting yourself be okay with where you are at that moment. Plus, it’s hurting your founder brothers and sisters too, because when they pitch, investors are going to think they’re another blagger.
I understand “the game”. But we all have a choice in how we play. If the rules involve any form of lying, exaggeration or covering up the truth, I’m not playing. And it’s up to other founders to learn how to be smart and hustle without having to losing integrity. Whilst the market is in a downturn this is especially important — there’s scarcity and when there’s scarcity, there’s fear. There’s going to be even more temptation to lie or fudge the numbers to get out, but it’s a false economy and just an even faster way to the bottom.
Don’t hide from the truth. Embrace it, be honest and you’ll invite connection. If you had a record revenue month, sweet! You need help turning it into a recurring record revenue month? Great! That’s honest, that’s real and that’s where the growth lies.
I want a startup ecosystem that leads the way for how we want business to be done in the next 50 years. Honesty and integrity are a big part of that.
I’m not here for the froth of pumped-up valuations, inflated headcount and dreamed-upMRR. I’m here to create, to build and to change industries. I hope you are too.