Richie Etwaru

An accretive investor/founder relationship is more a friendship than a partnership. It is based on a series of unstructured interactions. I have had investors and have angel-invested in startups where the cadence of communication is structured. There is very little value added to those discussions; you are simply reporting the facts and clarifying them. Alternatively, I have worked with investors (and co-founders) who are friends, who text you all day and at all hours of the night with ideas, thoughts, and hunches. This is where the magic happens. Yes, maintain communication, and work as hard as you can to make it a friendship, not just a partnership.

Conflicts need mediation, disagreements need discussion. Disagreements are one of the best ways to generate value. No group in history has ever performed disproportionately well while agreeing with each other. Disagreement that leads to constructive discussion is the raw material for disproportionate performance.

Don't be pushed around. In my experience, a founder by definition has to take risks and has to have conviction in something that others will think is wrong for a prolonged period of time until it is proven to be right. So, investors are not going to understand a founder's bet. This is where belief comes in. Investors and team members have to believe in something that others may not believe in. And that belief comes from the founder's ability to create it. Bottom line, if you as a founder cannot generate belief at scale, then it's on you if the investors cross your boundaries. Because if they do, it is because they don't (or no longer) "believe" in you. It is all about belief.

Conflict is bad, disagreement is good. If founders and investors find ourselves in conflict, it is highly likely to result in litigation. If founders and investors find ourselves in disagreement, the result can be transformational to the arc and risk of the venture. I have observed that first-time founders struggle with disagreement with investors, and investors who were never operators struggle to add value. My advice is to work with serial founders and investors who were once operators; this is the optimal combination, and any disagreement here will turn out to be a masterclass of a debate to listen to.

A favored investor of mine, who became my serial-backer, reached out for guidance regarding another one of his investments. My guiding principle in raising capital is "ask for advice, receive capital; ask for capital, receive advice." In this scenario, the investor sought advice—a situation most people would welcome. Our conversation naturally shifted to my activities, and before long, we developed a friendship. If an investor truly values a founder, they should consider seeking the founder's insights on other investment opportunities.

Engage with current investors. From my experience, when a current investor introduces another investor to the venture, over half of the preliminary work is already completed on my behalf. Current investors also have a vested interest in securing additional funds to sustain growth, given that the majority of startups fail due to running out of capital before definitively establishing their viability.