Don’t Pull Founders Around

If it wasn’t for founders/entrepreneurs there would not be investors.  It is founders that fuel the opportunities for investors and they should be respected.

I have seen some poor practices over the years and I am going to believe what goes around comes around.  Here are a few rules that I believe investors should follow.

Don’t make founders jump through hoops when you have really no interest in investing in them.  Tell founders exactly where you stand, what you are uncovering and why or why not you are not going to invest.  Don’t continue to provide assistance and then bring them in to see the team when the reality is the firm is never going to invest in that founder.  Their time is just as valuable as yours and it is a hell of a lot harder to raise money than it is to give it away.  Be honest which means don’t spend time talking to one company when you are talking to another in the exact same space grabbing as much information as possible before shoving one off into an abyss.

Bottom line, just as founders want to be smart about who they take money from, investors should be forthcoming about the process that a founder is entering in with their firm.  Ethics play a big role here and as I said, what goes around will eventually come around, particularly when we have a downturn.

Comments (Archived):

  1. Semil Shah

    While I would never condone wasting anyone’s time, I have a slightly different POV here. A big part of being a founder is sales, and a big part of sales is generating and qualifying leads. There are tons of resources available now about what behaviors to be watchful of, and I think many companies, potential customers, and potential recruits can waste a startup’s time, too.

    1. Gotham Gal

      Very true

  2. jason wright

    It’s good to talk and to keep talking. you just never know when the go around comes around. It’s a small planet

  3. Ella Dyer

    From your lips to God’s ears. Having been on both sides of the table; I know how much easier it is to write a check, rather than raise one.