Article · 6 min read

How to Handle, and Share, Bad News

Jason Lemkin · SaaStr Free Intermediate

This is the piece for the judgment call in the question: what actually crosses the line into disclosure. Lemkin's rule is sharp, explain the stumble before it shows up in the numbers, not after, which draws a clean boundary between a material risk you must flag and the day-to-day friction you keep to yourself. It tells you the difference between an investor who backs you in the next round and one who feels lied to.

  • Explain a stumble before it hits your metrics, not once it already has; disclosing it after the fact is what erodes confidence
  • A monthly-update rhythm (by the 10th, even in rough months) is what earns you the room to share hard news calmly
  • Pair every piece of bad news with a re-forecast and a concrete plan, so you are reporting a situation you are managing, not just a problem
Open on saastr.com ↗

The question it answers

  1. How much of my cap table drama and internal conflict should investors ever hear about?

Read with it

  1. A seed VC walks through the exact scenarios you are worried about (a star exec jumping ship, a blown quarter) and gives you the... Founder Collective (HackerNoon) Article · 8 min read How to Break Bad News to Investors Micah Rosenbloom
  2. When a co-founder actually leaves, this India-specific guide is why quiet disclosure is not optional: most Indian SHAs carry... Treelife Article · 15 min read Co-Founder Disputes in Indian Startups: Legal Options, Buyout Mechanics and SHA Treelife
eChai Partner Brands The partnership →