How do you align the interests and expectations of VC investors and founders in a VC deal?

2 Communicate your vision and goals

As a founder, you have a unique vision and passion for your venture. You also have specific goals and milestones that you want to achieve. However, VC investors might not share or understand your vision and goals, especially if they are not familiar with your market or technology. Therefore, you need to communicate your vision and goals clearly and convincingly, and show how they align with the VC's objectives and criteria. You also need to be realistic and honest about the challenges and risks that you face, and how you plan to overcome them.

3 Negotiate the valuation and terms

One of the most contentious aspects of a VC deal is the valuation and terms. Valuation is the amount of money that the VC investor is willing to pay for a certain percentage of your company. Terms are the conditions and provisions that govern the relationship between the VC investor and the founder, such as board seats, voting rights, liquidation preferences, anti-dilution clauses, and exit options. Both valuation and terms can have a significant impact on the future value and control of your company, as well as the alignment of interests and expectations between the VC investor and the founder. Therefore, you need to negotiate the valuation and terms carefully and strategically, and seek a fair and balanced deal that reflects the potential and risk of your venture.

4 Build trust and rapport

Another important factor that can influence the alignment of interests and expectations between the VC investor and the founder is the trust and rapport that they establish. Trust and rapport are the foundation of any successful relationship, especially in a high-stakes and long-term partnership like a VC deal. Trust and rapport can help you overcome misunderstandings, conflicts, and challenges that might arise during the deal process and beyond. Therefore, you need to build trust and rapport with the VC investor by being transparent, responsive, respectful, and collaborative.

5 Manage the post-deal relationship

The alignment of interests and expectations between the VC investor and the founder does not end with the signing of the deal. It continues throughout the post-deal relationship, which can last for several years until an exit or a dissolution. During this period, you need to manage the post-deal relationship effectively and proactively, by keeping the VC investor informed, engaged, and supportive of your venture. You also need to respect the VC investor's role and input, but also maintain your autonomy and vision. You also need to be prepared for possible changes in the VC investor's strategy, team, or portfolio, and how they might affect your venture.

6 Learn from others' experiences

Finally, one of the best ways to align the interests and expectations of VC investors and founders in a VC deal is to learn from others' experiences. You can seek advice and feedback from other founders who have raised VC funding, or from mentors, advisors, or experts who have been involved in VC deals. You can also read case studies, blogs, books, or podcasts that share insights and lessons from VC deals. You can also attend events, workshops, or programs that offer training and networking opportunities for founders and VC investors. By learning from others' experiences, you can avoid common pitfalls, discover best practices, and improve your skills and knowledge in deal execution.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?