The Problem with Giving Advice to Founders

I am empathetic about conversing with founders on how to operate their businesses. Giving operating advice takes time to gauge. It is generally difficult for founders to hear operating advice from investors. Concurrently it is tough for investors to understand that their advice isn't taken entirely without question. The reason for this is context.

Investors' perceptions of a business are representations of what is happening through PowerPoint board slides and budgets on excel files. The information is concise and sterile. Investors see all lagging indicators of success or failure at a single point in time rather than the thought and emotion that went into it. They aren't on the phone with customers yelling at them, begging them not to cancel, or asking their employees to do more for less money. So when the advice comes during a board meeting, it appears easy and cheap.

The problem with this mentality of founders is that the advice investors give does not come quickly or cheaply. Generally, they have come from years of experience and battle scars. More often than not, if the investors have been doing this for any given period, they have seen a version of the same movie before. Investors get annoyed by their advice not being taken because it's so clear from not being emotionally attached to the problem.

Neither founder nor the investor has a crystal ball and can predict what will happen. What I can do as an investor is empathize that I have seen many movies- I am not living in this founder's movie. The only way to be effective is to build a relationship. Trust must be earned from founder to investor and vice versa. There is no shortcut to it. Once a relationship is made, giving and receiving feedback is much easier.