These are heady times in the land of startups. It seems like every other day you’re hearing news of record fundraising rounds and astronomical exits by well-funded startups. The underlying constant in each of these headlines are the investors who made the deals happen. While startup teams are in the trenches toiling away to ensure their company grows, investors can be left with an inflated perception of their own importance. Instead of realizing they’re interchangeable with thousands of other financial backers, some angels fancy themselves as king-makers in a master game of startup chess. If only they realized founders have a secret wish to whisper the following hard truths in their ear.
– Just because you’re a rock star on Twitter, that doesn’t necessarily make you a good fit for every startup. If you’re always busy jumping on the latest trends on Twitter just to boost your follower count, how on earth will you ever have time to help a worthwhile founder grow their startup?
– You might have invested in a unicorn or two. Heck, you might even have a legion of loyal backers willing to invest in your deals. Those facts don’t mean you’re the best investor or mentor to help grow startups in need of dedicated mentoring. If you have a track record of not being founder-friendly, you might find founders pass on your check in favor of an investor who is more aligned with their company’s long-term values and vision.
– When you assume you’re going to be invited into follow-on rounds when you’ve done nothing else but cut a check, you might be in for a rude awakening. Startup founders want backers who bring more than cash to the table. In this era of investors throwing funding at startups with even a little bit of traction, founders can afford to be picky in who they work with. Your mentorship is what will get you into follow-on rounds, not your initial check.
– If you don’t have expertise in a particular area, please don’t pretend that you do. While you might think your network means founders should immediately think of you for financing, that network is only valuable if you introduce relevant parties to each other. If you don’t have deep roots in a particular business niche, please be thoughtful enough to introduce startups to individuals who do. Your willingness to connect mentors and founders will not be overlooked or go unrewarded in the future.
– Even though you’ve backed a startup, that doesn’t mean they’re at your beck and call to be trotted out at every tech event you’re involved with. If it’s in their best interest to make an appearance, then by all means invite them to attend. If on the other hand they would be better off keeping their heads down and focusing on product developments, leave them alone. Just because you’ve written a check, that doesn’t mean startups want to be treated like they’re one of the performing acts in your dog and pony show.
Some investors have grandiose ideas as to their own importance. Flaunting their angel investor status in their Twitter bio matters more to them than it does to founders in the startup ecosystem. With an increasing number of funding options at their disposal, founders can afford to be picky when choosing who they get into a financial bed with. A silent yet steady mentor is often more valuable than a brash and boastful angel.