In today’s episode of The Startup Chat, Steli and Hiten talk about how to deal with Investor conflicts.
Disagreements happen all the time between founders and investors, and these can affect your performance and that of the business as well. So it’s safe to say that how you handle these conflicts when they arise is super important to the success of the business.
In this week’s episode, Steli and Hiten dive into how why conflicts might arise between founders and investors, what to do if these conflicts arise, why you shouldn’t get too emotional when they do and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:32 Why this topic was chosen.
03:50 Reasons why you might have a conflict with your investors.
04:32 What to do if you’ve got conflict with your investors.
05:08 The importance of making conflicts a business problem.
05:55 How to address investors you’ve got conflict with.
07:04 Why you shouldn’t be emotional about these things.
08:41 The first place to start when you’re trying to contain emotions.
09:33 How to deal with your emotions when you feel like you’re being attacked.
10:00 The importance of being cool and collected.
3 Key Points:
You’re a business person first and these people have given you money. Find your part towards being professionalThe first place you should start is with your own emotions.
Steli Efti: Hi everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: And today on The Startup Chat, we're gonna talk a little bit about investor conflict. Here is why I wanted to talk to you about this Hiten, a listener has been emailing back and forth with me for the last couple of days, and basically he describes a situation where he has perceived conflict with a number of his investors. And I thought it would be cool for us and valuable hopefully to the listeners to kind of talk a little bit about how do you deal with is when you have investors that wants you to do something completely different from what you want, or if you perceive that there's conflict and pressure with the people that give you money. So in this particular case, I'll summarize to my best of my abilities what has happened so far, which is, this guy a raised a small round, I think a total of 500k from some angel investors and some small VC investors, has gotten the company to profitability. And now that the company is profitable, he feels really proud of himself and that things are going really well, but now he's starting to get pressure from some of these investors. The pressure that he's getting is that, A, he's not thinking big enough, so they want him to expand into a lot more markets much more aggressively than he thinks is right. And there are also, he shared some quotes that they've used in talking to him, that seem fairly aggressive to me. The sort of thing of like, don't fuck with your investors, you might regret it one day and that sort of thing. It's slightly like intimidating language on taking on their path or their advice versus resisting or pushing back on it. I went back and forth quite a bit trying to understand how many investors are those, have they orchestrated this, is this is a bigger problem that he describes to me or a smaller problem that he perceives it to be, how much power they really have in terms of voting and all that. And my summary is that right now it's not that big of a deal, I think he is, he seems to me to be very sensitive to this problem, maybe hypersensitive. He has full control of the company, these people can't really like just politically do anything to him or force him to do anything. And there was never a kind of a departure of what he promised in the early days when he raised money and what he's trying to do now. It seems that one investor in particular is not a professional technology start...
Key points in this episode
In this episode
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