How can you manage conflicts between VC and startup management teams?

2 Respect your roles

The second step to manage conflicts with your VCs is to respect your roles and responsibilities as the founder and the board member. As the founder, you are the visionary, the leader, and the executor of your startup. You have the most knowledge, passion, and commitment to your business. As the board member, you are the overseer, the supporter, and the guardian of your startup. You have the fiduciary duty, strategic insight, and network access to help your business grow. Therefore, you should balance your autonomy and accountability, leverage your strengths and resources, and collaborate with your VCs to achieve the best outcomes for your startup.

3 Negotiate your terms

The third step to manage conflicts with your VCs is to negotiate your terms and conditions carefully and fairly. VCs often impose various terms and conditions on their investments, such as valuation, equity, dilution, vesting, liquidation preference, anti-dilution, board seats, veto rights, and exit clauses. These terms and conditions can affect your control, ownership, incentives, and returns as the founder. Therefore, you should understand the implications and trade-offs of these terms and conditions, seek legal and financial advice, and negotiate with your VCs to protect your interests and rights as the founder.

4 Address your issues

The fourth step to manage conflicts with your VCs is to address your issues and concerns promptly and constructively. VCs may have issues and concerns about your performance, progress, strategy, governance, or culture as the founder. You may also have issues and concerns about their involvement, feedback, support, or alignment as the VCs. These issues and concerns can escalate into conflicts if they are not addressed properly. Therefore, you should be proactive, transparent, and respectful in raising and resolving your issues and concerns with your VCs, and seek mediation or arbitration if necessary.

5 Appreciate your value

The fifth step to manage conflicts with your VCs is to appreciate your value and contribution as the founder. VCs may sometimes underestimate, criticize, or pressure you as the founder, especially when your startup faces challenges, uncertainties, or failures. You may also sometimes doubt, blame, or resent your VCs, especially when they disagree, intervene, or withdraw from your startup. These negative emotions can damage your relationship and trust with your VCs. Therefore, you should appreciate your value and contribution as the founder, recognize your achievements and learnings, and acknowledge your VCs' support and guidance.

6 Build your rapport

The sixth and final step to manage conflicts with your VCs is to build your rapport and relationship with them. VCs are not just financial partners, but also human beings with personalities, preferences, and passions. They may have different backgrounds, experiences, and perspectives than you as the founder. They may also have different communication styles, expectations, and feedback methods. Therefore, you should build your rapport and relationship with your VCs, get to know them personally and professionally, and cultivate mutual respect, trust, and understanding with them.

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?