As soon as I wrote the title of this blog post I jokingly thought to myself, “Wait, is there a such thing as a non-difficult entrepreneur?” The obvious answer to that question is yes, but for anyone who consistently works with entrepreneurs, it seems the really difficult entrepreneurs are the ones that are most memorable (and not in a good way).
When you examine the statistics of how many startups actually succeed, it’s very puzzling why some entrepreneurs are offended when investors don’t share the same enthusiasm for the company as the entrepreneur does. It is very refreshing to interact with entrepreneurs who are mature enough to understand the essential components of risk and that they are not immune from them. This certainly doesn’t imply the entrepreneur is going to fail or is okay with failing. It simply means the entrepreneur is aware of the possibility of failure and they should be okay with their investors skepticism.
Investor skepticism is natural and I think it’s something entrepreneurs have to learn to manage. Those that manage it quickly and appropriately are often the ones who are able to consistently raise capital from their investor base. Those that inappropriately manage their investors by being combative, argumentative, and arrogant will push their investors away and erode investor confidence.
I certainly don’t think entrepreneurs should roll over and let investors do or say whatever they want to them. That doesn’t make sense at all because it is not fair. However, I do think it’s reasonable to expect that if an investor is willing to invest a significant amount of capital into a startup, the entrepreneur would and should approach these opportunities in a professional and courteous manner. For example, the following behavior is unacceptable: not responding to emails in a reasonable timeframe; interrupting others when they are talking; not accepting constructive feedback; lashing out at others with opposing viewpoints; not regularly updating investors on the company’s progress; having an attitude of entitlement; raising your voice unnecessarily; not listening; exaggerating the good and ignoring the bad; showing up unprepared for important meetings; having unrealistic timeframes for funding; being unwilling to negotiate; having unreasonable expectations around valuation; and the one that confuses me the most – entrepreneurs who think they know everything and don’t want anyone’s help, just their money.
I can say with 99.9% confidence that all investors who invest in early-stage deals have experienced all (or some) of the above behavioral traits from entrepreneurs at one point or another. At the end of the day, one of the most critical skills needed to work in venture are people skills. I would consider people skills a soft skill because it’s not really something you can teach, per say. It kind of just has to be worked on and picked up over time.
No matter what you do professionally, it is inevitable you will deal with difficult people. Personally, I enjoy conflict resolution – it’s fun when it turns out well. At the core, I believe most people are doing what they feel is best. As such, I try to approach every potential conflict with this in mind because it helps me to see things from their perspective before I begin formulating my responses. I also believe most people just want to be understood, even if they don’t get their way. If you approach each conflict with an open mind and a willingness to listen, dealing with difficult entrepreneurs (or difficult people in general) becomes a lot less difficult and a lot more satisfying. Cheers -KM