Two different companies I profiled last night shared their revenue numbers with me in virtual interviews, but were both shocked that I printed the numbers in their profiles.  Each company asked that I remove the numbers and I complied with their requests.  This got me thinking: when should you keep your revenues secret and when should you release them?

Do release them:

• if you are raising professional (vc or private equity) capital
• if you are experiencing rapid growth without any outside capital

Do not release them:

• if you have raised professional money and are experiencing rapid growth
• if your revenue numbers are NOT growing

If you are hoping to raise money from venture capital firms you might as well release your revenue numbers (current and projected).  Once your deal is shopped EVERYONE who cares will find out anyway.  Once you have raised your first round of professional money it may make sense to keep your numbers secret, at least until your existing investors decide that another venture capital firm needs to lead the series b round (i.e. because they are tired of the deal or they are out of dry powder).  Why? Perhaps you are able to grow VERY fast and instead of alerting your competitors to your hockey stick, you may want to keep a lower profile.

On the other hand, if you manage to achieve 'hockey stick' growth on your own with little or no outside investment, revealing that fact could help you take your business to the next level.  Savvy investors who 'discover' your business (i.e. the fact that without outside capital you are kicking butt) can easily figure out how to put more capital to work within your business to take advantage of the 'hockey stick' you have built.  Does this make sense?  Having an investor come to you is SOOO much better than trying to get an investor to see you.

If you keep your revenues secret (prior to accepting professional investments) people may assume they are lower than they actually are or even worse that you don't have a real company.  Perhaps YOU think they are too low.  Get over it, you are a startup ~ the size of your revenues aren't as important as their trend.  Don't be embarrassed that your startup has little or no revenue, especially in technology related startups ~ don't apologize.

Finally, NEVER lie about your revenues.  I repeat, NEVER lie to ANYONE about your revenues.  The problem about lies is that you will need to keep them straight and it is impossible to keep them straight over time.  For example, we meet at a network event and you suggest in 2003 "we are doing $1MM in revenues and are growing by 20% per year."  Two years later we run into each other at another event and you tell me, "We are about to raise money from Austin Ventures."  I ask, "have the growth numbers held up?"  You tell the truth and say, "Actually, they are better than we expected, we have growth 300% over the last two years!"  I do the math in my head and ask, "Wow, you guys are doing $3MM in revenue?"  You are actually doing $1,000,000, but your growth has really been 300%.  You have taken your great story and completely screwed it up by lying two years earlier.  I am good friends with one of the guys at Austin Ventures and mention to him, "I can't believe company x is doing $3,000,000 in revenue! 300% revenue growth in two years is amazing!"  You get where this is going?  At best you have caused your integrity to be called into question and at worst you may have cost yourself the deal.  NEVER LIE ABOUT REVENUES, EVER!

Note to companies I profile: if you don't specifically ask me NOT to print something you can expect it to be posted in your profile.