The Theranos Scandal shows how quickly investors will trip over themselves to grab a golden egg deal. When investors pay so much attention to just the (alleged) big tickets, they leave smaller companies in their portfolios.
The investment space is in the midst of a mental health crisis and skyrocketing burnout rates. Founders of all sizes and sizes need dedicated support, and an unhealthy business relationship can take a toll on your mental health. Ultimately, every founder needs to know that their investors are playing with them.
Based on my time as a professional NBA player and a veteran investor, here are a few warning signs that a VC can leave you on the sidelines:
Your check-ins are a recurring calendar event
Most VCs have busy schedules and they have an unspoken habit of assigning founders a weekly or monthly time slot to hit the ground running. Not only is this not enough time to really catch up with the founders and hear about their life outside of work (which ultimately impacts their work), it sets a precedent for communication to be regulated.
Founders and investors would like to spend time together outside the boardroom and Zoom conversations. When there is true trust, discussions about hobbies, family and vacations will naturally arise and break down the formal barriers that keep investors and founders from talking about their well-being. These topics don’t come up naturally if founders only get an appointment-like meeting with investors.
The right investor will not make a deal and then take themselves out of the equation.
That’s not to say investors shouldn’t have scheduled meetings with founders. Instead, investors should make it clear that founders have the freedom to call them whenever they need to — whether it’s business guidance or personal support, there should be an open line of communication. Of course, investors can set limits and say they are not available after certain hours or on certain days.