As a thoughtful angel investor, I want to do my best to help the founder succeed. After all, if the startup does well then everyone benefits.
Now, the advantage of being an angel is you get a 30,000 foot perspective. You are invested in the success of the startup, but because you’re not involved in the daily nitty gritty, you get a far better sense show of what’s going on at the macro level – something which the founder may miss, because he is stuck in the trenches and has to fire-fight the daily problems which plague founders.
It’s often easier for an outsider to see what’s going well, what’s not going well, what the strengths and weaknesses are. This viewpoint is complementary to the founder’s skills.
An Angel’s Perspective Versus A Founder’s Viewpoint
Good angels can help the founder to raise more money; improve his ability to market his product, and ensure good governance, so that the company remains on track to achieve success. This can be a win-win, but the problem is that sometimes the founder doesn’t see eye to eye with the investor and this is when friction occurs.
Some entrepreneurs are extremely smart, but as an angel you sometimes worry about why they’re so short-sighted. They all have strengths, but like all of us, they also have weaknesses and they need to fix these if they want to continue to grow.
However, especially when the founder is a techie, he’s so much in love with his product that he’s not willing to do what is required in order to be able to sell his product successfully. Selling his idea to the next round of investors forces him to get out of his comfort zone, and he may not want to do this.
Dealing With Recalcitrant Founders
Actually, all he needs to do is to learn simple skills such as how to speak confidently in public and how to prepare a pitch. It’s important for founders to be charming and persuasive, especially when they are hiring employees. These guys are smart, and these are learnable skills which they can master if they decide to do so.
Thus, as an angel, you can try to tactfully point out their deficiencies, and then offer them resources which can help them to bridge the gap.
For example, we can hire an executive coach for them; suggest that they join public speaking courses; or help them to rehearse their pitches.
However, I have learned the hard way that all I can do is to take a horse to the water – you can’t make him drink! Unless the founder trusts that that what you’re trying to do is to help him achieve success, it’s very hard to help them!
They feel that you are interfering with their life or trying to micromanage them, and this creates even more conflict.
It’s hard to keep quiet when you see the founder is determined to go down the fast track to failure, but all you can do is to show him a mirror, and hope that you have had the sense to back a founder who has the maturity and self-awareness to face up to the truth, and to accept help gracefully when this is proffered, rather than try to dig himself even deeper into the hole he finds himself in.
These are my personal views. How have you dealt with such situations?
[This post by Dr. Aniruddha Malpani first appeared on LinkedIn and has been reproduced with permission.]