Founders vs. Companies

Photo by Xiaolong Wong on Unsplash

I noticed something while watching founders pitch their early-stage startups: when raising their first investment round, the founders “sell” themselves as the main assets of the new venture. Everything revolves around their previous experience, their educational background, their many talents, and skills. It’s everything about them — probably it’s only normal as the idea of their startup is still to be validated by the market.

Later on, when pitching again to raise their second investment round, the founders start “selling” the company. The focus moves from the founders’ biographies to the relevant metrics of traction, be it revenues, monthly active users, corporate clients, or anything of this sort.

The savvy investor notices the switch and sees it as a confirmation that the startup is on the right track.

If the switch is not happening, and the founders keep promoting themselves, it’s a signal that the company is in shallow waters. Quite often, the self-laudatory founders are not even aware of the situation. It is the investors’ role and duty to bring clarity to the matter and force the narcissistic founders to face reality.

As time passes, the company may overtake its founders. In other words, as the company matures, founders must scale with it. But we’ll discuss scaling some other time.