This is a bit extreme. You're going to have to tell them your cap table and how much money you have before you close a deal. So it can't be correct advice never to tell VCs that. The question is when.
I was surprise to read that you shouldn't tell VCs about "Other investors you are talking to". Although I've never approached VCs, I can imagine that the quotation below is pretty close to reality:
"(VCs are like high school girls: they're acutely aware of their position in the VC pecking order, and their interest in a company is a function of the interest other VCs show in it.)"
If you let them know that lots of hot, cheerleader-VCs think you're kind of cute
Usually if that is the case, you shouldn't have to tell them. They'll know. That aside, I thought the article was aimed at the other 90% of startups that don't have VCs knocking their doors. In those situations, I think it helps to be careful about what information you give out.
Maybe I'm more upfront or something than most people, but tip #1 seems kind of dishonest. Why would you tell someone you're trying to build a trust relationship with that everything is just fine when it's really falling apart?
I think as the current cycle in Valley gets more competitive, you'll see fewer people being super open. Not just VCs but everyone, especially entrepreneurs.
