As an angel investor, you want your startup investment(s) to succeed. Many of the factors that influence success are internal to the business – e.g. workplace culture, founder decisions and operational efficiency. Yet, there is another key variable…
The dynamic between angel and founder can significantly influence the trajectory of a business. A strong, positive relationship can foster innovation, resilience and growth. A poor relationship, however, can lead to miscommunication, frustration and failure.
For angel investors in the UK, it’s crucial to understand and engage with the human aspect behind a startup. Here’s how to nurture a successful, long-lasting relationship with founders.
Align Your Values and Vision
For some reason, founders are not always the best at choosing investors that align with their vision. One key reason is likely the pressure to get the startup growing (“I just need the money”). Founders may regret this mindset later, but it often falls on investors to drive that conversation at the beginning.
If you haven’t yet invested in a particular startup, make sure to ask questions that reveal a genuine alignment in values, long-term goals and ethical standards. Ask open-ended questions during the due diligence phase to explore the founder’s motivations and vision.
Healthy scepticism is important for investors. However, be careful about getting the relationship off on the wrong foot. A “shark tank” mentality is unlikely to be constructive in the long run.
Instead, start with empathy to foster a relationship of mutual respect. If you can all share a sense of purpose (or at least understand and support it), you are more likely to add constructive value as an investor.
Establish Clear Expectations Early
Misunderstandings between founders and investors often stem from unclear expectations.
Decide together early on what your involvement will be. Are you keen to be a passive investor, a mentor or a hands-on advisor? Are you available for regular calls or only in emergencies?
It is common for UK angel investors to take non-executive roles or advisory positions in startup investments. But you can choose whatever mutually works for you. Just ensure the relationship is properly documented to avoid overreach or disappointment later.
It’s also wise to agree on how often you’ll communicate. Will the founders offer monthly investor updates or quarterly check-ins, for instance? Also, consider the medium you will use (WhatsApp groups or formal board meetings).
If all parties have a clear rhythm and style that works for everyone, this can help prevent fatigue in communication and maintain a consistent flow of updates.
Provide Value Beyond Capital
One of the most appreciated contributions from angels is their network.
Making introductions to potential hires, customers and co-investors can be more valuable to a founder than the investment itself.
Early-stage founders often ride an emotional rollercoaster. The pressure can be immense. By establishing yourself as a connector, you can give founders more traction.
Be delicate with handing out advice. Even if it is valuable, founders do not always want your input. Not every moment requires your intervention. Be especially conscious of this during times of operational intensity (e.g. a product launch or fundraising round).
An angel’s job is to help founders make better decisions, not make decisions for them. Respect their right to lead. Ask questions. Offer alternative views. But let them execute their vision.
Handle Conflicts Constructively
The startup road is very rewarding but also emotionally draining for everyone involved. Even the best angel-founder relationships come under strain in such circumstances. Conflict is inevitable, but what ultimately matters is how you handle it.
A great book to consider on this subject is “Never Split the Difference”, by Chris Voss. Drawing on his former experience as the FBI’s lead negotiator, Voss offers some very practical advice on negotiation that can be very helpful in a situation of angel-founder conflict.
For instance, it can diffuse the other person’s anger if you engage in “active listening” and label the other person’s feelings (e.g., “It sounds like you’re concerned about the burn rate”).
Another helpful tactic is to carefully summarise the other person’s viewpoint in a way that leads them to respond with “That’s right”. This helps your counterpart feel heard and understood, thereby building trust and opening the door to finding a mutually beneficial path forward.
Celebrate Milestones Together
As an investor, be careful not to only “turn up” when things go wrong. That sends the wrong message. It’s also important to celebrate the “wins” when they arrive.
For instance, send a congratulatory email when the team lands a major client. Maybe offer to buy the team lunch after a funding round.
Other ideas include providing a LinkedIn shout-out, recommending founders to other investors or highlighting them at an event.
Such gestures humanise the investor relationship and create a sense of shared journey.
Invitation
A positive founder-angel relationship isn’t built overnight. It takes intentional communication, humility and shared commitment.
Mastering this relational dynamic is what turns good investments into great outcomes. After all, founders look to you not just for capital, but for guidance, encouragement and understanding.
Want to speak to us about our early-stage opportunities here at our exclusive investor network? Get in touch today to explore our startup projects here at Bure Valley Group.
