

Ask HN: Funding, Secrets & Disclosure - just_starting

My question requires a little background, so please bear with me:
This is a story of 2 startups S1 &#38; S2. They have both spent some time building their products and have been trying to get funding for their respective companies. But the founders of S1 &#38; S2 are buddies and before their funding they had been brainstorming and spending time on a side project. They have been thinking that if this side project gets any traction, they will spawn it as a separate company and work on it in parallel. But until then they are committed to their primary startups and this will remain a side project. Now that both the startups are getting funded by different guys, they are debating whether they should disclose their side project or keep it a secret.<p>So, I have 2 questions:<p>1. What could be the consequences of a disclosure before taking investment money?<p>2. What is the fair and sensible thing to do?
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maxdemarzi
Put yourself in the investors shoes. How would you like to be treated if you
were the investor?

Right so disclose it.

If you don't want to make a big deal out of it, just "over-disclose"
EVERYTHING that takes time away from your Primary start-up.

Are you a meet-up group organizer, speaker at conferences,
contributor/maintainer to open source libraries, responsible for your cousins
online shoe-repair website, coach a little league team, are in the national
reserve, planning a wedding, etc

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steventruong
1\. Definitely disclose it. Disclose everything that would potentially be an
issue. Things that take your time away, any legal issues, the whole nine
yards...

2\. If you are going to take on funding, move off the side project, or rather
put it on the shelf. As an investor, no one wants to invest money into a
company or its founder only so they could spend any spare time they have on
another project when they could be spending it on the startup they were
suppose to push 24/7.

