The Top 5 Mistakes Founders Make With Their VC Investors

In rough order:

#1. Hiding Important Things.

VCs are wired to take bad news. But not for it to be thrown at them at the last minute:

#2. Not Knowing the Zero Cash Date Cold.

You just have to know exactly when the cash runs out. And manage to it.

#3. Expecting Existing Investors to Bail You Out.

Sometimes, they will give you more money. Just as often, they won’t. But whatever you do, don’t expect it. Ask. Just ask. “Would you invest more today?” Just ask.

#4. Paying Themselves Too Much.

Pay yourself market. Whatever you do, get it approved by your board. Paying yourselves way too much is always a big red flag to investors. Because the best founders want as much cash to stay in the company as possible.

#5. Not Doing Regular Monthly Investor Updates.

These take care of so much of the above. It keeps everyone in the loop. It shares your zero cash date. It shows what’s going well, and what isn’t. It ensures a decent amount of transparency. Just do it. You aren’t too busy to do them: