When Founders And Funders Don’t See Eye To Eye

It’s very rare that the course of a startup is smooth sailing. When the company is doing well, then both the founders and the funders love each other. Everything is hunky-dory, and no one can do any wrong. However, the reality is that there will often be lots of bumps along the way, as a result of which the founders and the funders may disagree. This is especially true when you have a group of angel investors who have invested their hard-earned money, because each of them has a different perspective, and they will often disagree with each other as well.

How can the founder manage these conflicts? It can be a tricky situation, but the worst thing to do is to lapse into radio silence. Many founders do this as their instinctive response, and refuse to communicate with their funders because they don’t want to be hassled. They feel that they know the most about their company, and want to focus on tiding the crisis. They don’t want to be distracted, and they don’t think the founders know enough to be able to provide any valuable insights.

This sets up a negative vicious cycle, because the investors then feel the founders are trying to evade their responsibility, and are hiding the truth from them. This is the biggest mistake founders can make, because then you will lose all their support, and they will not be there for you when you need them. The most mature thing to do is to step up to the plate, and accept the fact that managing the conflict is part of your job description ; and that you’re the one who’s responsible for trying to find a solution.

Try to find one person amongst the funders who’s on the same wavelength as you are, and try to connect with him. Use his help to try to look at things from their perspective. What aren’t they happy about? What are they happy about? What are you doing right? What have you done wrong? What do they expect from you going forward?

Often the suggestions they have can be valuable. While it’s true that you know the most about your company, your team, your product, and your market, they will often have a lot more cumulative experience in the startup ecosystem. They have seen a lot of other startups which have folded or have grown, and they’ll be able to share some of their insights. Don’t ever forget that both of you have the same interests at heart – you both want the company to succeed . Your long-term interests are aligned, and you need to be able to tap into this pool of good-will in order to make sure that you come out stronger , even though there maybe differences between your perspective and theirs. It’s upto you to show them that you are in control, and you know what you are doing , so they are reassured that the company is in safe hands, and their money is not going to go down the drain.

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