How Can Entrepreneurs Deal with Nosy Investors Some investors interfere too much in the day-to-day operations, giving the entrepreneur no space
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Investments don't come easy, but when they do, they bring along with them the rule of the investors. Once the investor is on board, entrepreneurs usually go all out to prove their worth. Although today most investors are looked at as mentors by founders, there are also times when things are not that rosy. Some investors interfere too much in the day-to-day operations of the start-up, giving the entrepreneur no space to bring changes according to his own.
The founder also becomes answerable to the constant probing by investors. Entrepreneur India spoke to start-up founders on how they deal with such a situation.
Set Boundaries in the Beginning
When you strike a deal with the investor and are working on the legalities of the same, it is important that you mark out the boundaries at the time. By doing that, you are leaving out no room for errors. Shishir Gupta, CEO, Startuplanes, said, "Design a term sheet to avoid conflicting situations and do not allow too much space to the investors."
Avoid Ego Issues
It is best to avoid any sort of conflict with the investor, for after all, he/she is the one pumping in money into your idea. Disagreement with investors in front of your employees ruins the office environment and lead to a tense situation.
Gupta believes that in such a scenario, it is best to avoid taking the investor's approvals in the presence of others. It works out better if you approach them separately, so as to avoid ego issues.
"If you think an investor has a habit of objecting everything then follow the principle of "reverse ask' i.e. ask the opposite of what you want to achieve, e.g. if you wish to get a Yes from him/her then propose him/her for a "No' and then you will get reverse of it," said Gupta.
There's a Thin Line Between Nosy and Involved
While talking about nosy investors, it is also essential to note that sometimes an entrepreneur could just be taking the investor's inputs in a bad light. Instead of getting emotionally involved, it is best to analyse the situation and understand why the investor is asking for a change in the way you run your business. For Mallika Sadani, CEO, MomsCo, her investors have always been involved, a quality that she specifically looked for in her investors, as it would help her grow. "They understand our product and the space we operate in and are ready to give us time. It makes the journey easier if your investors are involved as they open up many more avenues for your business," she said, adding that one should avoid an investor who's just there to make a few quick bucks.
Being comfortable with your investor is another bonus believes Mallika. Meanwhile, Gupta believes that entrepreneurs too need to keep a few things in mind. "Don't be nosy yourself, you can't expect from others if you are nosy yourself, what goes around comes around," he said.