Many entrepreneurs tend to exaggerate, especially when talking to investors about success of their business. Funding your business without exaggerating isn't easy, however one need to understand a clear line between optimistic exaggeration and outright fabrication. These are some guidelines to help you kick start your start up without selling your soul or spinning a web of lies.

Create excitement and exclusivity among investors and business partners
Even if your product isn't ready, you can use a similar approach to raise funding for your business by getting investors and business partners -- who can provide financial support -- to compete to be first. There's a certainexcitement in being part of the first group of investors, partners or customers to help launch a business.

You can create the feeling of exclusivity by spreading limited invitation to use your "beta-version" product/service and generate buzz about your product plans among blogs that investors read. There's less need to exaggerate if you can set expectations that your product is still being tested among early adopters.

Develop financial projections which based on verifiable assumptions
Investors and VC firms tend to see financial projections that shoot up like a hockey stick. And thus, entrepreneurs often feel compelled to exaggerate projections to look like their businesses can reach a billion dollars of market value in just a few years. But justification need to be made. There's no point fabricating a set of projections that aren't based on reality.

One way to build a set of realistic projections is to start with business drivers that can be discussed and debated with investors. Let's say, if you're selling bread that depend on the cost of each ingredients, develop a set of financial projections that link selling price to the number of bread you plan to sell and the changing price of ingredients. This will show how much market value and allow investors to understand what assumptions you're basing your growth on.

Write paychecks that increase the business grows
One of the most difficult tasks for entrepreneurs is to convince talented employees to join the team and stay on the team before company is profitable or stable. As a start up owner, you have to option of paying you employees: Pay your employee a market salary and take a bet that you can grow the business to justify the salary, or share risk with your employee by paying a below-market salary plus equity incentives.

Many experienced entrepreneurs agree that it makes more sense to share risk with employees, at least until you have funding or until your product line gets market traction. While this makes sense, it often puts the entrepreneur in the position of having to recruit employees by exaggerating about how developed the company's strategy is, or how popular the company's products are.

Employees are among the first to know when funding prospects dry up, strategies fail and products don't sell, so it's better to be upfront about the risks of joining a young company. But enable new recruits to share in the rewards of business success immediately rather than waiting for their equity to appreciate.

Do you have any experience of creating excitement for your business? How did it work for you?

How to Combine Excitement with Honesty To Grow Your Start up