How do you navigate conflicts between founders and investors in underperforming portfolio companies?

When handling conflicts between founders and investors in underperforming portfolio companies, I always begin by facilitating open and transparent communication. This allows both parties to express their concerns and perspectives. I then mediate to find common ground and focus on shared goals, such as improving the company's performance. By providing data-driven insights and potential solutions, I aim to align everyone on the best path forward. Additionally, setting clear expectations and fostering a collaborative approach encourage cooperation and a united effort to turn the company around.

When you take a portfolio approach, it's very common to see that not all your companies perform well and that may be due to several factors. Operational factors include poor product, team conflicts, trying to scale too quickly etc. Financial factors include running out of cash, inappropriate pricing, and unstable business model. Market issues include lack of market need and not reading your competitors well. Legal factors include intellectual property disputes, regulatory issues etc. All of this should be assessed deeply and addressed by investors with empathy and domain knowledge.

When addressing conflicts between founders and investors in underperforming portfolio companies, it's crucial to emphasize the importance of a shared understanding of the root causes of underperformance. Encourage open dialogue and collaboration to identify the underlying issues, whether they are operational, financial, market-related, or team-related. By working together to understand the challenges, both founders and investors can develop a more effective action plan to address them, ultimately leading to a higher chance of turnaround and success for the company.

Beyond assessing issues and fostering dialogue, it's crucial to re-establish a shared vision for the company's future. This involves revisiting the initial investment thesis and aligning expectations for the company's growth trajectory and potential exit scenarios. By reaffirming the shared vision and goals, both investors and founders can re-engage in a collaborative effort towards a successful outcome, overcoming current challenges and working together to unlock the company's full potential.

As a venture capital investor, a key part of our role is communication. At the end of the day, we are all in the business of people not just money. Being a natural mediator and great listener always helped me to find solutions in conflicts.

The most important thing in working with anybody in a professional environment, is to align interest. To some degree, there is always going to be different incentives, yet when there is a common understanding and goal, we can all work much better together. Having a good dialogue between founders and investors upfront, to make sure that there is a good fit between the two is critical. Sometimes we assume what other people want, and that can lead to challenges down the road. It is also important to have frequent communication and re-alignment, to make sure our common understanding is still intact.

Creativity is a must. An attitude towards mutual benefit is always important. You need to think strategic and ahead of the game.

Informed decisions is key. However I do use my intuition more and more as I grow older. Sometimes we underestimate the value of listening to your inner guide and energy around you.