Investors are not founders

Founders often look to raise from investors who've been operators, thinking that shared experience creates better alignment. In theory, it makes sense. But my observation is that being a founder and being an investor are fundamentally different jobs - and conflating them is one of the most reliable ways for a relationship to go wrong.

The investor's goal is to maximise financial return across a portfolio of companies. The founder's goal is to build a single, large, profitable business. One is playing a broad game, the other, a deep one. Understanding this distinction and acting accordingly is what separates productive investor-founder relationships from frustrating ones.

What founders get wrong about investors

1. Expecting depth they can't have

The most common complaint after a founder's first few investor meetings: "they didn't know enough about our industry" or "they had no idea how our business works." They're not supposed to. They structurally can't. An investor talks to 100 companies a year, invests in a few, and actively manages a portfolio of 10 or so simultaneously. Even with their own portfolio - where they go the deepest into any business - they might spend a few hours a month on any single company. Specific, granular knowledge about most businesses simply isn't possible given how they operate.

It might come as a surprise, but investors rely on founders to build their understanding of businesses and industries. They don’t have the lived experience of most problems, so they're piecing together a picture from the experience of others. Their mental models are most influenced by the successes and failures of their own portfolio. Over time, this compounds into a general heuristic: what tends to work and what doesn’t, what to prioritise when, at different stages in the company’s journey. That's what they're bringing to the table, not domain depth.

2. The sector expertise paradox

Over time, investors can build competence in specific sectors and business models. This should make them better at evaluating those businesses. But it also makes them more opinionated - not just about what works, but about what doesn't. And in my experience, those opinions are very hard to shift.

So sector expertise is a double-edged sword. An investor who knows the space well might be the best possible partner - or they might be the one who's most blind to the innovation the founders are building, because they already know all the reasons it won't work.

3. Deferring when they shouldn't

A sizeable number of founders, especially first-timers, hold their investors above them when it comes to business judgement. They over-index on what the investor thinks, and discount what their own customers, team, or instincts are telling them. Sometimes this happens because the investor has more experience. Sometimes because they feel an implicit obligation to listen to the capital provider.

I think this is a fatal mistake. I've seen companies go in the wrong direction - sometimes irreversibly. The investor is working with a fraction of the context the founders have. Their opinion on the business is, at best, a useful outside perspective. It is not a verdict. The mirror problem runs in the other direction. I've heard this story on repeat from founders: they got excited when an investor said they would bring operator expertise, and later realised that involvement was more interference than contribution.

What investors get wrong about their own role

1. Acting like an operator

It usually doesn't come from bad intentions. Investors want to be useful. They've seen a lot, they have opinions, and it's a slippery slope from sharing a perspective to trying to steer the company. In practice, it often looks like pushing a view on product direction, go-to-market, pricing, or hiring, repeatedly, across meetings, until the founder starts second-guessing themselves. Most investors probably never see it happening. But founders spend hours debating with themselves just because an investor had a different opinion. That's unnecessary noise.

2. The founder-turned-investor challenge

When founders transition to investing, they bring real empathy and hard-won experience - both genuinely valuable. But it also makes them more susceptible to creating exactly this kind of friction. Their operating experience is real. It's also anchored in a different company, a different market, and most importantly, a different time. Given how fast things move, mental models from even two years ago can be obsolete or actively misleading. The investor's job is to ask questions that surface the founder’s expertise, not replace it with their own.

There's a second problem that's less talked about. If investors keep thinking like founders when making investment decisions, it leads to bad portfolio outcomes. They can't optimise purely for a company's potential - they have to contextualise it across their whole portfolio. They can't think only about whether a business can work; they have to think about whether it can work at a scale that produces a venture return, within a holding period that makes sense for the fund. These are totally different lenses. Investors who stay stuck in founder mode miss this, and it shows in their decisions.

What a good partnership actually looks like

The investor's job

Help with fundraising - introductions, framing the story, signalling conviction to downstream investors. This is the one domain where an investor genuinely knows more than most founders. They've been on the other side of dozens of fundraising processes. They know what makes a round move and what stalls it. This is where their involvement has the clearest return.

Surface patterns that the founder can't see from inside. Not "here's what you should do", but "three companies I've worked with hit this exact problem at your stage; here's what happened." That kind of input is hard to get elsewhere, and it's useful precisely because it comes from outside.

Hold founders accountable for what they said they'd do. This is different from telling founders what to do. It means remembering the priorities from the last conversation and asking what happened. That accountability function, done without judgment, is underrated. And give founders space. The best investor I've seen in action spends most of a monthly call listening. Two or three good questions. No filling silence with opinions. The founder leaves clearer, not more confused.

The founder's job

The most experienced founders do one thing differently: they lead the relationship instead of deferring to it. They come to calls with an agenda. They share the context that their investor needs to be useful. They're specific about what help they're looking for. And when they get input - good or bad - they weigh it on its merits and then make the decision they think is right.

That last part is the whole thing. Investors can open new angles of thinking, introduce useful context, and ask the question that reframes a decision. But the decision is always the founder's. The moment that stops being true, the relationship has gone wrong, regardless of who let it happen.

If a founder relies on an investor to figure out how to build the business, they're probably not going to make it. If an investor thinks their advice can make or break a startup, they don't understand how businesses are built.

The best investor-founder relationships are the ones where both sides have internalised this. The investor knows their job: capital, patterns, fundraising, accountability, and space. The founder knows their’s: build the business, lead the relationship, take what's useful and leave the rest.