You hate your VC. Now what?

This happens.  Occasionally you and your investors/VC won’t see eye to eye or worse yet, you’re sideways with your VC and the relationship is acrimonious or hostile.  While I’ve never had a hostile relationship with a founder, certainly there are times where we’ve been in disagreement on major issues or a founder isn’t happy with us for one reason or another.  Here’s what we’ve found can improve the relationship and get things back on track:


Cool off.  If the relationship with you and an investor is deteriorating, take some time off from each other.  This may be a few days or a few weeks.  Communicate to the investor that you’d like to take some time off from each other and get a date on the calendar to revisit in person or on the phone to revisit issues.  Time heals and generally when you do sync back up, cooler heads prevail.


Go one-on-one.  If you’ve been having disagreements with a particular board member during board meetings, get the person to talk to you one-on-one with no one else present.  In a board meeting with others present, an investor/VC will feel the need to assert themselves in front of others.  Egos are at their highest in front of peers.  Having a one-on-one conversation will at least remove that need for self assertion in front of peers and allow you to make progress towards a solution.


Use a go-between.  If one of your investors/VC is having major issues but others are not, ask one of the other level-headed investors/VC to reach out to the hostile party one-on-one and try to further understand the issues.  This is classic back-channeling. Generally that conversation may uncover the root of the problem, what the person really wants, the way to a solution, etc.  The go-between should of course not mention that you sent them.  The goal isn’t to mediate, it’s for a third party to uncover information in an uncontentious atmosphere.


If all of the above fail, ask your attorney two things: i) how can you remove this person if they’re a board member; and ii) can this person do anything to make your life truly difficult (sue, block certain actions, call shareholder meetings, etc).  Understanding your downside and what the hostile investor can do is important.  The one thing I would say you absolutely shouldn’t do is go silent on the hostile party.  Always communicate even if it’s uncomfortable – silence causes the investor to imagine the worst possible outcome materializing.  Good luck.


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