I've learned that there is a significant cultural difference between European and American entrepreneurs in respect to their relationship to investors. In Anglosaxon culture, the management runs the company and even though investors often have some formal rights in respect to approving certain decisions, it's usually expected that the management makes up their own mind. If investors really don't like the way the startup is run, they have the ultimate power to change the management.
In Europe investors are perceived as coowners of the business, so they have the right to influence daily decisions. Quit often if a coowner (particularly a powerful one) suggest something, it's perceived as an order, even if the management isn't quite aligned with it. It will get executed.
It's the conflict of the two concept that causes many troubles in quite a few occasions, particularly with first time entrepreneurs. Management is responsible for running the company, investors may suggest something, however management should view that only as an advice, not as directions. Investors won't take responsibility for the actions, but they will demand it.
As with all cultural conflicts responsibility to overcome them lies in hands of both parties. Investors should be aware that in the eyes of European entrepreneur they have more power than they are used to. And entrepreneurs should constantly demand themselves that investors are partners, not the owners with ultimate power. After all if they new how to run the business they wouldn't just invest in it... they would run it.
I’ve Moved Onchain
7 months ago
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