Number 1 Mistake VCs Make with Founders Post Close: Hint-Words Matter...

Being a minority investor (VC) puts you under limited control. You are not operating the company and represent a voice on the board and shareholder level. Ultimately you live on the whim of what the founders (usually the majority) want to do with the company post-close, except for protective provisions and board rights if you negotiate for them. If this sounds scary, it's because it is. That is why selecting the right founders is critical.

After investing, you sit on the sidelines- you cheer while also living in anxiety. The only thing you have going for you is the words you speak to your founder. Everything you say must be calculated as founders, like most people, are very sensitive and ego heavy. They know that you do not understand the business as they do, so any feedback keeps them on guard. For me, it is essential to choose my words carefully, as I know I cannot take them back. Additionally, once you lose your founder's trust and confidence, it is nearly impossible to get it back.

I have seen it over and over again with other investors. They say something during a board meeting, and then boom! They lost the founder. That does not mean not to challenge or confront - you need to leverage how you do so to achieve your desired outcome. You must pick your battles and ensure you have all the information before making statements.

Also, another quick tip- it is always better to talk to founders 1-1 when challenging them as opposed to in a board meeting. This is obvious, but for some reason, investors want to make everything a performance.