The Partnering Pledge for Founders & Investors
Mar 8, 2022 | Business
View a printable version here.
This pledge is meant to be modified to reflect your own system of values.
About the Pledge
The Partnering Pledge for Founders & Investors is a framework to align values and foster long-term, thriving partnerships between founders and investors. The objective: make the tech community a more positive sum, healthy environment for all parties.
The following commitments apply to both the founder and investor.
I commit to:
- Be impeccable with my word
- Assume positive intent in every situation
- Deliver feedback in a constructive way
- Not force key decisions based off desire for liquidity
- Ensure conversation are constructive vs destructive, solution-oriented vs blame-oriented
- Fully own up to mistakes
- Keep in mind the importance of having fun
Investors who take this pledge have the mindset that, once they invest, they are all-in on helping the founder succeed. They believe that this approach is in their long-term best interest, resulting in better financial outcomes, more founders who want to work with them, and more prosperity for everyone involved. Oh yeah, and way more fun.
As an investor, I commit to:
- Put the company first before my firm
- Be all-in on helping the founder grow
- Empower the company to prioritize the long-term over the short-term
- See each investment in as its own independent commitment, not part of a portfolio
- Embody a customer service mentality in serving the company, not the other way around
- Honor the founder’s final decisions, including on sale of the company
- Never take a founder’s decision personally
- Share my thoughts openly, transparently, and respectfully
- Drive value to the company when able
- Support the company in both good and bad times
- Generously but fairly compensate teammates
- Never share company information with others without permission
- Be clear and upfront regarding existing competitive investments and policies towards future competitive investments
Founders who take this pledge reciprocate the commitment of their investors with trust and respect.
As a founder, I commit to:
- Listen to my investors fully and openly before making a final decision
- Make the right decisions for the company, even if they’re unpopular at the time
- Do everything in my power to ensure the company’s success
- Be honest with investors with what type of outcome is the ultimate goal
- Clearly communicate my level of commitment towards the company
- Keep investor informed as to meaningful outside obligations
- Only ask for compensation in which I believe is justified and fair for both myself and my team
- Convey company traction and metrics accurately
- Let investors know both when things are going well and when they’re going terribly wrong
Investor – FAQ
Q: What if I see something wrong? What if I disagree?
A: Speak up. Founders need investors and other sets of eyes to see around corners. Surface these issues in a constructive vs destructive way. Healthy debate and disagreement makes companies better and stronger. Founders adhering to this pledge committed to listening fully but making an independent final decision. Investors respect this final decision, even if at odds with their own opinion.
Q: How do I deal with compensation issues where there might be misalignment?
A: Approach these issues from the perspective of “what is best for the company?” If the founder has an outsized impact on the company’s success, feeling good about their economic position is important to the company’s long-term success. This keeps them all-in for the long-run.
Q: What if a founder wants to sell the company?
A: If the founder wants to sell the business, it’s important to respect this stance and figure out if either 1/ you can mutually agree with the founder on a replacement hire to keep things going or 2/ support how to make a sale happen.
Q: What if a founder is making immature decisions?
A: Get to know a founder before deciding to invest. If they’re at an earlier stage of maturity, know that going in, and be all-in in helping them grow up by giving them feedback in a constructive and thoughtful way.
General – FAQ
Q: What if someone breaks one of the commitments?
A: Ask the person if they’re open to a feedback session, usually best over a call. Start the call saying that you 1/ have feedback for them, 2/ would also like to give them a chance for feedback in the reverse direction if they have any, and 3/ are ultimately doing this because you’re committed to a thriving long-term partnership. Then, deliver the feedback, hear their response, discuss, thank them for listening, and finally ask them if they have any feedback.
Q: What if the relationship breaks down or there is a fundamental disagreement?
Investors: In these situations, investors choose to explore options for distancing themselves vs creating conflict. Options might include 1/ asking the company for permission to sell your stake, and working with them on the right timing to make that happen, 2/ voicing your disagreement and telling the company you’ll be distancing yourself i.e. not adding any further value, or 3/ resigning from Board roles. investors never hold the company hostage with votes because of disagreements.
Founders: In these situations, founders let investors know that they no longer are comfortable working with them and would like to explore good-faith options to create distance. Options may include the three listed above.
The Partnering Pledge is mutually agreed upon between the parties.
As with everything in this document, these are simply drafts to serve as a starting point.
For founders prior to bringing on an investor:
We’re excited about the opportunity to have you on board.
Alignment in values is everything to us, and the Partnering Pledge for Founders & Investors is something we always sign before partnering. Our signed version is attached. Please give it a read and let us know if you are aligned with these values.
All the best
For investors prior to backing a founder:
We’re excited about the opportunity to invest in your company.
Alignment in values is everything to us, and the Partnering Pledge for Founders & Investors is something we sign with anyone we invest in. Our signed version is attached. Please give it a read and let us know if you are aligned with these values.
All the best