Let us address the elephant in the room.
VCs, investment platforms and angel investors who post about founders' mental health, getting huge impressions from the content: you are part of the problem.
There is a problem that every business founded in 2023 thinks the first thing it should do is just rock up and raise capital. And no, not every company is entitled to the investment you offer. But when you open that dialogue or advertise this service, you must be aware of the impact you have on people.
Raising is the most sensitive time for a founder
The most sensitive time for a business owner is when they are raising capital. To you, this might be a £20k cheque and one of 300 applicants this month. To a founder, this is a salary for the next year. This is real life, and it's not to be messed around with.
I have been so poor on my journey to this point. I remember feeding my children eggs and having to give my dogs the shells just to get to the end of the week. The glimmer of hope from a response can turn into a void of darkness, and it hurts.
In my experience of working with hundreds of founders since 2018, most companies are close to death. They are six weeks or less away from the final curtain call. I have to remind people that yes, this is a "startup", but there is a very real person behind it, who is likely behind on rent, likely under intense strain and pressure, and likely running out of options.
What investors should stop doing
Here are some things not to do, or at least to be more mindful of and recognise when you are doing them:
- Ghosting applicants
- Providing no feedback
- Providing no alternative channel
- Misleading investment criteria
- Moving the goalposts
- Dragging out the process
- Suddenly pulling out
Founder-centric funding is possible
There are some who do this incredibly well and who are really leading the way, in my opinion, in founder-centric funding. So it can be done.