Treat your VC investor like your wife

Once you’ve successfully raised equity funding for your business, what happens next? Well, the first thing to understand is that you’re now married.

It may not feel like that when you’ve just wrestled for months over the terms of the investment. Those warranty limits still smart; you are still fuming that you’ll have to go to your investor to sign off any capital expenditure over £25,000. But that’s over: you’ve agreed the pre-nup. Don’t let it destroy the romance.

Treat your investor right

Make sure that you match or exceed the expectations that you set. If you say you’ll be home for dinner, your partner has the right to be upset if you’re not. Set a budget that you can hit and then beat it.

Communicate effectively

Don’t leave illegible last-minute notes on the kitchen table. Give your investor the information he or she needs in good time and in a format that they understand.

Build a good relationship with your partner

After all, marriage is meant to be fun. Go out to dinner from time to time and understand what they have on their mind.

And if it does not seem to be working? Well, meet some of your partner’s old friends and get their insights; talk to some of the other CEOs your investor has backed and try to understand what is going wrong.

If that still doesn’t work, you may have to enlist some outside help. Find someone to give impartial marriage guidance. An experienced chairman, for example, can work wonders.

If none of that works, you might have to acknowledge that you’ve made a mistake. Make sure that you have a fall-back plan that your partner can’t wreck.

Most importantly of all, make sure that your partner has no way to run off with the children, or to take your house away. Your pre-nup – your “shareholders’ agreement” – may be solid, but you must have an alternative to running out of money and having to ask your investor for more. Otherwise, at that point, you’ll have lost your company.

Simon Acland is a former venture capitalist. His latest book,”Angels, Dragons and Vultures: How to Tame the Venture Capital Beasts… And Not Lose Your Company” is available on Amazon.

Picture source

Share this story

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x
Send this to a friend