Early on, when Collaborative Fund was just taking shape, I approached someone I respected and hoped would invest with us.
I was optimistic and passionate, but also young and nervous, and I think he could see that.
I had been talking for too long. Probably over-explaining out of anxiety.
He eventually cut me off.
He said, “you know what, son?” (I’m not sure if he actually said “son,” but I think it helps the story.) “I will invest with you.”
Oh my God! Yes!
“On one condition.”
“Just don’t shine the turd.”
I wasn’t sure I heard him correctly. I asked him to repeat himself.
“Don’t shine the turd.”
I wracked my brain. The what?
Keep in mind, I was new to the industry. I didn’t have a finance background. So I wondered if this was some Wall Street thing I haven’t heard of? Is it an acronym? T.U.R.D…?
Turns out I was overthinking.
He went on to say, “If something is shit, don’t hide it. Because eventually, I’ll smell it.”
He explained that he’d been at this a long time, and he accepted the possibility of failure. He wasn’t afraid of it anymore. But what he wouldn’t put up with was someone pretending everything was going great when it actually wasn’t.
I agreed not to hide anything. He agreed to trust me.
I’ve held onto that advice, and kept that promise, ever since.
It’s hard to be an entrepreneur. And one of the most difficult things is reporting bad news, especially to someone who has trusted you with their money.
That’s why I pass this advice on to everyone I work with: When you update your investors, be honest, tell the whole truth, and give context. Mistakes happen, but no one can help you fix them if you aren’t honest that they’ve been made.
It concerns me when I get consistent updates that all is well only to hear later that a problem has been allowed to grow and snowball into something much bigger and less fixable.
Nine times out of ten, getting only good news is actually bad news.
So this is what I try to do: Be up-front. Figure out the problem. Create a plan to reverse or minimize it. And always own up to it.
Shit happens. Don’t shine the turd.