Entrepreneurs sometimes misrepresent, obfuscate, and generally distort the truth when pursuing investors and other crucial stakeholders. By extending the lives of failing businesses, this kind of deception locks up resources, making it difficult for Venture capital firms and employees to decide where to invest. It also has a particular impact on the founders. So let’s investigate entrepreneurs and the truth in more detail.
Why Entrepreneurs Lie
Researchers have investigated the roles entrepreneurs play in the modern capitalist system. The researchers found that entrepreneurs distinguish themselves from other businesspeople by their readiness to act in the face of uncertainty. Businesses of all sizes face uncertainty, but start-ups face the challenge of navigating through a dense fog.
In most cases, entrepreneurs do not know if their product will work, how to manufacture it, who their customers will be, or how they will reach them. True entrepreneurs are those who dare to act despite uncertainty, while others seek to avoid it.
A solely entrepreneurial approach, however, is insufficient. To win investors, persuade customers to take a risk on a new product, and instill confidence in the team in the face of erratic ups and downs, an entrepreneur must be a persuasive cheerleader.
Having several opportunities to manipulate is the main reason why some entrepreneurs are dishonest. It is more important to them than to other businesspeople to be always available.
It is also easy for entrepreneurs to get away with deception due to the ease they can do so. As a privately held company, founders have access to information that investors, customers, and employees do not. Public companies have extensive transparency requirements and intense scrutiny; many people will find out about it if they lie.
The Honest Entrepreneur
The majority of entrepreneurs want to gain the trust of others and demonstrate that they are deserving of that trust. Almost no one aspires to be a rogue. It has been shown that lying and deception can cause significant stress for most people. The stress of ongoing ethical dilemmas can reduce job satisfaction and cause burnout, according to studies.
Developing virtue in the workplace is part of a better approach that encompasses all areas of life. Aristotelian worldview holds that actions are right when they are those of a good (virtuous) person.
Several scholars have approached this issue from different disciplinary perspectives. In their opinion, common justifications for such deception are not credible since they fail to hold up to scrutinies, such as the need to protect investors and employees.
Additionally, they provide founders with some moral philosophy advice: Having a big vision is excellent, but be open and honest about the evidence and assumptions that support your vision. Finally, it would be best if you surrounded yourself with good people who will promote your development.
There is extraordinary pressure on entrepreneurs to tell lies. Some entrepreneurs may believe that they are disadvantaged if they pursue their ventures with a zealous devotion to the truth because they compete for a fixed pool of Venture Capital funds. The truth that lies are all too common in this economic sector can be reduced if we understand the forces that encourage them to lie and the methods to keep them upright.