Over the past three years, we have invested in many startups.
I noticed a disturbing pattern with most founders.
The moment they take money, everything changes. Lead investors start controlling them, and founders let it happen. In our meetings, I hear founders constantly saying "I need to ask my investor first" or "Let me check with the lead investor."
This is painful to watch. Brilliant entrepreneurs who pitched confidently suddenly become nervous employees asking for permission to hire someone or change their product strategy.
This happens most with two types of founders:
First-time fundraisers who think taking money means giving up control. They're grateful for the investment and don't want to upset their "benefactor."
Struggling startups running low on cash. When runway gets short, founders panic and start treating investors like saviors who must be obeyed.
But here's what I've observed: Successful, profitable startups treat investors completely differently. The founders who are crushing it don't ask permission - they give updates and seek advice, but they make their own decisions.
The successful founders understand a simple truth: Investors are not your boss.
Think about what actually happened when you raised money. You didn't get a boss - you hired team members with specific skills.
You interviewed multiple investors. You chose who to work with based on their experience and network. You gave them equity in exchange for their expertise and connections. You expect them to add value beyond just money.
That's exactly how hiring works.
Yet most founders flip the script the moment money hits their account. They start reporting up instead of managing down. They become subordinates in their own company.
Here's the reframe that changes everything:
Your investors are remote team members who happen to have a lot of money. You're not paying them salaries, but you're giving them equity at a discount. That equity is their compensation for joining your team and contributing their expertise.
But just thinking of them as team members isn't enough. You need to actually manage them like team members.
This means:
Keep them informed with regular updates - but on your schedule, not theirs. Monthly updates work better than weekly reports or random crisis calls.
Give them specific tasks that match their expertise. Your former startup CEO investor should help with strategic decisions. Your industry veteran should make customer introductions. Your well-connected VC should open doors for partnerships.
Set clear expectations about their role and contribution. Don't leave them guessing how they can help.
Treat them like valuable consultants, not like supervisors you report to.
The difference is dramatic.
When you manage investors properly, they become your biggest advocates. They proactively make introductions. They defend your decisions in tough times. They bring their networks to help you succeed.
When you let them manage you, they become a bottleneck. Every decision requires their approval. You move slower. You second-guess yourself constantly.
I've seen both scenarios play out dozens of times.
The founders who treat investors as team members raise follow-on rounds faster, build better relationships, and ultimately build better companies.
The founders who treat investors as bosses struggle with every decision, move slowly, and often burn out from the stress of constantly seeking approval.
Your choice:
Be the CEO who manages a distributed team that includes investors, or be the employee who reports to people who gave you money.
The most successful entrepreneurs I know treat everyone - employees, advisors, investors, customers - as contributors to their vision, not controllers of their destiny.
You started this company. You define the vision. You make the decisions.
Your investors chose to join your journey. Now manage them like the valuable team members they are.