No, you should not share the names of the other VC's you are meeting with. Let me explain the rationale and then give guidance on how to reply.
The reason why we don't want you to share the names is that it reduces your power in almost all scenarios. If you say the name of another fund to a VC, every time you meet with that VC, they will ask for an update of what that fund is doing. Statistically, most funds will pass. And the moment they pass, it will diminish that VC's outlook on you. Alternatively, the VC may reach out to the fund. And then they may collude. Meaning they will get together and offer you a joint term sheet -- with terms that may be worse than if you kept them separated. You lose your power then in the negotiation.
Instead, we want you to address the underlying need without giving names. The need is to drive the VC to make a commitment, and for the VC to know if there are others in a bigger raise so they aren't the only ones.
So the protocol we recommend is this. Say that as a policy, you do not mention the names of other funds you are in diligence with. This is partly out of respect for them -- you don't have permission to mention their names. And also, because as a company, you value investors that choose to invest in you not because of the brand names of the other funds that are interested in you, but because of their independent conviction.
Now -- if there are funds they want you to meet -- they can send you a list of names, but to let you decide if you want to connect in. If you do, you may reach out independently. And you will let them know if you would like to connect in.
(But in practice you should not try to connect through another fund. It's best to reach out independently or through Alchemist. If a fund gets connected into you through another, it can lead to the same collusion issues above. And if a fund gets connected to you through another fund, there's a gentleman's agreement where the final fund needs to carve out the connector into the round (even though they might not have wanted to if they met you independently).
Also signal this:
We are in late stage diligence with several funds and investors. And there are a lot of moving pieces on how the round will be composed and who is invited in. And so, as a company, you are asking everyone who is interested to signal how much they want to invest and any other caveats (e.g. if you have issues with the valuation / others), by [a given deadline] and then you will revert back if there is a spot and the round details for them to hard confirm.
(Credit: Ravi Belani)