Dear Aunty B,
I am presenting to investors in order to get expansion capital and I wonder what the line is between being brutally honest and presenting a positive outlook. For example, my accountant who is a diehard pessimist made me do a list of risks the other day that would turn anyone off their breakfast. But surely I am not going to present that to investors when I am asked about the risks of expansion? Where Is The Line,
Brisbane
Dear Where Is The Line,
I like the term “reasonable” risk. What does that mean? Well, you won’t find that in your commerce books so don’t bother looking.
But I think of it like this. Our legal system can lock people up and throw away the key if a bunch of 12 strangers think that someone did something beyond “reasonable” doubt. So when you are stuck about what to say and what not to say, imagine 12 people sitting in the dock deciding whether it is a reasonable risk or not.
If your imaginary jury comes back with a yes, then you should disclose it. If the jury comes back with a no, then dismiss it as a risk.
Just one thing. You cannot stack your imaginary jury with all your nice entrepreneurial friends. That would be cheating!
Good luck,
Your Aunty B
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
