I have been talking to a potential investor in one of our deals and we were talking about syndicating the round to other institutional investors. He said he wanted to have a say in who the other investors were. I told him I understood this conceptually...but specifically, what did he think about investor x....and I gave the name of the investor. He said he didn't see a problem if x wanted to invest. Then he followed that up with the question : "so who else are you talking to" and I answer "y and z" and actually gave the names of firms -- I'm leaving the names out here to protect the innocent) The conversation continue for another 30 minutes.
On the way home, I was beating myself up for telling him the names x, y, and z. I told him for a simple emotional set of reasons: I like him, trust him, and feel like he's going to be a lead investor and so wanted to treat him like one. In that way, answering his questions, theoretically advanced our relationship and was a pro move. But he is not yet the lead investor -- and I just gave him the names of some of the people that I've been talking to and that information in no way can help me. One of the first lessons I learned in raising capital is don't tell the investors who else you're talking to. It's raising money lesson 101! What a rookie mistake.
Since that conversation, I actually talked about whether this was a mistake with the investor -- I'm not overly worried about it and it probably was both a mistake and a pro move. If he ultimately invests, then it was a pro move. If he doesn't, I'm sure I'll view this as one of my errors!
