Disappointing Types of Investors
In this environment, every investor has a well-honed pitch on how they can uniquely add value. Being a founder of a high-growth startup means that you will encounter many situations you never have before, so choosing an investor who will be a partner in building the business is a key decision. In this context, promises of exclusive value-add resonate deeply.
Surprisingly, most founders find that the actual value they receive from investors is not always as promised. I have had the opportunity to work with amazing investors who build great thought partnerships with their founders, who are invaluable in making the decisions that change the trajectories of companies, and have superpowers in attracting talent.
In the spirit of helping founders look beyond the promises of value, let’s delve into some common archetypes of investor relationships that founders experience post-investment. I hope that both founders and investors will read through these archetypes with a sense of humor. Like a good episode of “Silicon Valley,” there is some exaggeration here for effect, but not much!
8 Disappointing Investor Archetypes
The Narcissist
Narcissists are completely full of themselves, and everything is always about them — how great their firm is and how great they are. They’re so enamored with themselves that they never take time to understand what founders really want or need. They’re not going to add value to your startup.
The Child with a Hammer.
This is the investor who tells you to follow their advice because “We used to do this when I was at Google,” .They have a hammer, and every problem they see looks like the same nail to be pounded in — in the same way, they did it in the one significant experience they previously had in their professional career. They lack the perspective that there could be 10 other ways to approach and solve the problem.
The Know-It-All.
This is the investor in meetings who doesn’t want to hear anyone else’s opinions, including the founders’. They don’t respect founders or their fellow board members, which is damaging to vital relationships and board dynamics.
The Lapdog (aka the cheerleader)
This is the investor who is never going to deliver the hard message to you — they’ll always try to be friends with the founders because they want a recommendation to the next company. They’ll pop into a meeting and invite you out to dinner or on a lavish ski trip.
Disappointing Types of Investors
The Service Router.
The service router will point you to people but never aim for excellence or help a founder figure out what looks good, say, in a new VP of sales. Service routers are good at recirculating among their portfolio companies. The problem is that the talent might have done a fine job at one company but isn’t the right fit for your startup.
The Needy Ned
This investor will drive you nuts because they want to be involved in everything your company does, regardless of whether they’re adding value in the process. You’ll know you’re dealing with a Needy Ned when they’re surprised and outraged when you haven’t told them every operational detail of your business. A more difficult version of Needy Ned is someone who not just wants to be involved but is trying to grab the wheel out of the founder’s hands and do things their way.
The Numbers Person
For this investor, business is a big, complex spreadsheet, and everything can be reduced to a number or a ratio. The trouble is, they don’t understand the story behind the numbers, and they don’t know what it takes to move them.
The Drive-By
If you want your investor to stay out of your hair after they send some funding your way, then the drive-by is for you. They’re deal machines — even before your deal is sealed, they’re already on to the next one. By the time two years go by, they have completed 10 other deals and they’re not remotely interested in you as a founder or a company.
Disappointing Types of Investors
