How to Deal with Skeletons in your Closet

What about issues that might have a slightly negative connotation that the VC couldn’t know in advance?  Skeletons in the Closet are these types of issues.  They are issues, though, that your VC would certainly find out during due diligence or at a minimum you’d be ethically obliged to tell them. These are all things that you know you’ll eventually need to tell your VC and ethically you must tell them before they fund you.  But when in the process should you tell them? I’ve had this debate several times with VCs – sometimes they agree with me and sometimes they violently disagree.  In this particular case – I’m right.  Here’s my advice: Don’t reveal your “skeletons” in the first meeting but you need to tell your sponsoring partner before the full partner meeting.


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Mark Suster 

Mark Suster is a 2x entrepreneur and an investor. He joined Upfront Ventures in 2007 as a General Partner after selling his company Koral to He focuses on early-stage technology companies. 

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Filed Under:
Collection: Funding
Category: Negotiating & Closing