Nightmare investor

[NewTime]

After a few weeks of talking to people about an events start-up, I got a few interested people talking, some was annoying from get go and some was just offering nothing.

Anyway, two people are still involved and happy to go ahead with funding which is set to go through in the next few days. But after this all my ideas and suggestions got turned on their head. Suddenly started talking about sponsorship and they said that their current business would sponsor it and I don't want that, it doesn't work.

An event framed at only Manchester and London, is now being turned into "oh well why not try Birmingham" etc or telling me which staff to use or we will use their staff.

There's a lot more they've tried to change too - product changes - alcohol orders - venue suggestions - licensing issues

Struggling as I now don't think I can work with them and we was securing a date and venue this week, well was supposed to!

 

[Mark T Jones]

I'm fairly sure the answer was covered in your previous thread

 

[NewTime]

I'm fairly sure the answer was covered in your previous thread

I am afraid not - different investor this time

 

[Mark T Jones]

I am afraid not - different investor this time

The principles are the same

 

[MBE2017]

Unfortunately you have not set out with your investors what roles and responsibilities you each have. You are unhappy, fair enough, but did you state and get a written agreement they would only be investing money, rather than ideas and management of the project?

I think you need an urgent meeting to thrash things out, but they hold the power due to yourself not doing things correctly.

 

[MOIC]

If the contract hasn’t been signed, pull out.

If the contract has been signed, seek legal advice, explaining what has happened since.

Either way, proceeding with this investor isn’t going to work.

Have funds been transferred to your account?

 

[WaveJumper]

if clear boundaries were not put in place an agreed too from day one expect more frustration ahead only you know what has been agreed to and as already suggested above an urgent meeting is needed before this goes any further and its to late to turn back.

 

[Chris Ashdown]

Often we get so pig headed with our own idea's that we are unable to listen to good advice from other people. sometimes people see a opportunity to work with a company for various reasons and then under deeper thoughts can find different ways the company could go forward

The solution is as always sit down and talk, TALK IT ALL THROUGH

 

[fisicx]

An investor will be calculating how they can financially benefit from the arrangement. It may be that their profit will only be realised if the business model is changed. They aren’t a nightmare investor, they just have a different set of values. Maybe they see you as being the problem.

 

[NewTime]

Often we get so pig headed with our own idea's that we are unable to listen to good advice from other people. sometimes people see a opportunity to work with a company for various reasons and then under deeper thoughts can find different ways the company could go forward

The solution is as always sit down and talk, TALK IT ALL THROUGH

In fairness I have asked myself if I am the problem, but all their suggestions are not going to work and they have suddenly decided to try and promote their existing business through this potential new event.

I haven't signed anything and I rang them today to say to hold off. But I am set to cancel anyway.

 

[The Byre]

Every investor - myself included - that actually gives someone money or other assets to help run their business, finds that the person they are investing in needs either guidance or they are going off the rails in some other way. It could be that we thought that there would be some symbiotic relationship with an existing business that needs to be addressed or that the new business is heading off into a field we do not like for some reason.

You do not have Nightmare Investors. You have investors - people who have made it clear from the get-go which direction they want the business to take.

This happens every time and at every level. If Blackrock or Berkshire-Hatheway buy a 20% stake in a company for a billion or so, they expect a seat on the board and a say in the conduct and running of the company. If you don't like them apples, the answer is to not seek out outside investors.

 

[studioJK]

Hi @NewTime

Sorry to hear that you weren't happy about the relationship with your investors.

I hope your event was a success! In which case, it may be worth following up with this success to discuss how projects should be run going forward with your investors. For example, if you would like passive investors only, it could be a chance to set the expectation to see if your investors would be happy with it. At the end of the day, it is a conversation (though there is a chance that you might need new investors who meet what you are looking for).

Going forward, it would be worth setting out expectations with your investors in either an investment agreement or shareholder agreement, depending on your structure. This would make sure everyone is on the same page.