Page 58 - Entrepreneur-November 2018

The Big Idea

Should Entrepreneurs Lie?

We may not like to admit it, but we all do it. So the real question is: Where’s the line? by JASON FEIFER

ary Hirshberg knew his cofounder, Samuel Kaymen, The SBA liked what it heard, Let’s put it bluntly: This is
the exact amount of calculated, they could open and that positive response set common. Entrepreneurs lie.
money he needed to their own facility and regain in motion the funding that It’s not like they regularly drop
save his company: their footing. would save Stonyfield Farm Theranos-level falsehoods to
$592,500. It was So Hirshberg drove down and enable it to grow into one defraud customers and inves-
1988, and his fledg- to his local SBA office with an of today’s most recognizable tors, but the scrappiness of
ling yogurt brand, informal proposal. “We’ve got yogurt brands. But in truth, entrepreneurship inevitably
G Stonyfield Farm, a bank willing to provide the the SBA didn’t know the whole leads to some kind of deception.
was near collapse—rocked by loan,” he told an officer, and he story. Hirshberg didn’t have a People say their company is big-
the closing of its third-party said his shareholders agreed to bank lined up. His investors ger than it is, that they’re more
manufacturer, hemorrhaging put up $100,000. All he needed hadn’t committed the money. prepared than they are, that they
money as it struggled to fulfill from the SBA was its 85 percent All he had was a vision for his know how to do something they
orders, and unable to find new loan guarantee, which would company, a plan to save it…and, don’t. They spot an opportunity
investors. But with that exact make the bank comfortable ugly as it may sound, a lie that and they lie to get it, and that
amount of cash, Hirshberg and executing the financing. would pull it all together. becomes part of their story—an

24 / ENTREPRENEUR.COM / November 2018 Illustration / VIK TOR KOEN