Brad Burnham of Union Square Ventures wrote a thought provoking post on the risk/rewards of entrepreneurs being open about their startup ideas. He emphasizes that through sharing your idea, an entrepreneur can gain much more than they have to reveal. The iterative process of continually running your idea by people with different perspectives will only continue to make your idea better.

We see this a lot through Angelsoft’s encounters with entrepreneurs. Either they’re not willing to share much information through our system, or they’re just reluctant to even talk openly about their idea when we bump into them at events. The fact of the matter is, not sharing won’t get you too far, and sharing more information is likely to increase your chances of success.

Reasons sharing makes sense, and the benefits outweigh the risks:

1) Investors are typically betting on the entrepreneur, and not the idea

Both VC’s and angels tend to focus more on which entrepreneur they invest in, and not necessarily which idea. Time and time again you’ll hear investors say they’d invest in a great entrepreneur with a bad idea, rather than invest in a bad entrepreneur with a good idea. A good entrepreneur will succeed regardless of the challenges, and regardless of the amount of people trying to steal their idea!

2) Ideas significantly easier than execution.

Anyone can have an idea, but it takes a lot of effort, commitment, ability to execute, and brute force optimism to launch a company and succeed. People in a position to compete with you are few and far between, so if you’re the right entrepreneur for investors to bet on, then have confidence and don’t waste time worrying about who steals your idea. Its very likely that many other people already had the idea, but just didn’t have the skill to act on it.

Mark LaRosa, Angelsoft’s VP of Sales and an entrepreneur himself, said “As an entrepreneur I reasoned that I was the only person that could execute on my idea, and that if I wasn’t willing to share the idea, then I probably wasn’t confident enough in my abilities to be raising capital for that particular idea OR that the idea was all that unique.”

3) Your pitch will be that much better

Every time you tell someone about your idea you are practicing your pitch, and you are getting feedback from someone with a slightly different perspective. Practice makes perfect. Do this a few times, and your pitch will be rough, do this a thousand times you’ll definitely see improvement!

4) Prove that you are continually learning about your own market

Proving to investors that you are knowledgeable in your market, and that you can react quickly to new information makes you that much more attractive as an investment. Investors want coachable entrepreneurs that can take feedback from experienced advisors and use this to build a better company.

Evan Bartlett :: Jun.06.2008 :: Entrepreneur ::