Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

Why Letting Insiders Invest Could Destroy Your Deal!

22 Nov 2024 · 1 min

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In this advisory segment, the speaker cautions founders against giving investors access to behind‑the‑scenes staff or allowing close advisors such as a CPA to become investors. They argue that insiders with detailed operational knowledge can weaponize that information if they become dissatisfied, potentially sabotaging the deal. The speaker recommends limiting investor access to standard financial statements—showing how money is spent and company expenses—while avoiding deeper operational disclosure, as over‑sharing can be disastrous for the transaction.

Chapters

Do not give them access to your people that are working behind the scenes. Never. They will use that as ammunition if they are not happy. I can tell you that right now. And also, do not let people like your CPA or somebody else be an investor in your deal because, you know, they have a little bit too much information. Yeah. On what's happening in your deal. But you should be giving them, you know, financials. Right? You know, an actual accounting on how their money has been spent, the expenses that the company has. That can become very disastrous.