VCs will often ask entrepreneurs where they are in the process with other investors. While most entrepreneurs’ first reaction is to promote their progress with other VCs to drum-up more interest, I’m not convinced that is always the best approach.

When it comes to promoting your progress with other investors, I generally think that you have more to lose than gain. Similar to the point I made about setting expectations in my post, Manage VC Expectations About Operating Performance, you should carefully manage a VC’s expectations about your ability to acquire other term sheets. If you tell a VC that you expect two term sheets in a week and you don’t get them, the VC will wonder what about your business scared away the other investors. This could severely hurt your momentum.

However, if you are certain that you have strong interest from other VCs that can help create interest – nothing draws a crowd like a crowd. Just be certain that the expectations that you set will be realized, otherwise you could create hurt your chances of getting funded.