• David Murray-Hundley

It should never be Founder vs Investors

The day you take investment from friends or family, or external investors then your business you thought was yours is no longer yours. I say this to a lot of founders, not entirely convinced they get this sometimes whether it be before taking external investments or just afterward when things change.

During the pandemic, I spoke to 1000s of founders. Some were in real trouble cashflow wise. I can tell you now the ones that found additional funds without being screwed on a deal were those who had good relationships and communications with their investors.

At the same time, I watch some founders who do an amazing job with communications that can raise next rounds with follow-on money relatively easy and a deal that works for all. I watch other founders who do the negative stuff I have put in this article, have a painful experience raising additional rounds, and usually do a deal that doesn't work for them and others.

So here are some tips on how to make sure the Founder and Investor relationship works well, plan ahead for the relationship or troubleshoot a current one.

Falling into the Beer trap

Yep, I said Beer and not Bear Trap. There are two parts to this, and it's a finely balanced thing to get right. It is quite rare to be able to go out and enjoy the beers with an investor but at the same time deal with them on the other side of the board table. The dynamics are hard to do. I have been fortunate enough that I have been able to do this once with an investor and also be the investor with a Founder and it has worked. But super rare dynamics and can be very confusing for the founder sat in a discussion that is working against them. Keep this separate if you can.

The second part to this, which is more just awareness. Have fallen into this one myself and had a VC who does $billion deals once sit with me and tell me that if you get an invite to an event or asked for dinner and your partner is invited then there is a pretty high chance they are gauging how much is important to you ie House, mortgage and push on those pressure points. What risk is important to you? Sounds like a game, well it is with some people and this is a real thing.


It sounds really really obvious but it's appalling with the majority of startups. Like really bad. At a basic Startup 101 level, never sending shareholder updates, never holding an annual meeting for shareholders. In fact, the only time Shareholders will hear from a founder is when they want something, ie money or things are not going to plan and want "yep" money. Founders wonder why they get a cold response. At the same time, founders moan that investors want constant updates but that's easily fixable with the monthly shareholder updates. The same Founders will moan to other Founders that shareholders won't support them in times of need. Seriously, it's an easy one, it's just ego, laziness, and respect stopping you Mr/Mrs/Miss Founder.


This falls under the communication side, but Founders your role is to be transparent with shareholders and board directors and not your version of transparency that fits your agenda. The number of Founders I see trying to bend the truth etc and we as investors or board directors sit there and know exactly what the deal is. My experience is, if a founder does it once, they head down a part of doing it all the time and spinning the truth more and more. Might feel hard to do and that you shouldn't have to, if you cannot get away from that it feels hard to do then don't take other people's money.

Beware the ego

It's pretty simple.

  • Founders have egos. Investors have egos, sometimes worse than the founders that it's almost cringe-worthy sat on calls with other investors.

  • Your personal agenda and goals are on a fine line with the best needed for the company.

  • Making a point is one thing, arguing for pride is just dumb.

  • A balance between sticking to your guns and screwing the whole thing up and alienating your relationship with the board and investors.

Goals that are measurable

A bit of Startup 101 again but goals and plans don't always happen on track. That's ok as long as you communicated to your board and investors what those goals and plans are. How you would spend the money they have invested? Those sales numbers are not on track etc.

Investor and Startup founder relationships are not easy to get right. Made even harder in that you don’t get to spend that much time with investors as you do maybe other members. Your time is also rare and valuable, so maximum impact with investors is key. At the same time, your relationship with investors is never equal, investors have the money but at the same time, they need you to deliver on the business. It takes some work for investors to give up on you in some shape or form and like a marriage you need to find a balance on both sides.

Trust me on this. If you are a founder, you might have investors for the next 10years. Get them onside, build respect on both sides and make your life and Startup journey about 200% easier. Best of luck.

David Murray-Hundley "the Grumpy Entrepreneur"

Co-founder of Pario Ventures, Chairman of E Fundamentals, and The Bunch.

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