Disclaimer – this article is pun ridden and uses stereotyping for “comic” effect
The beauty of the tech startup world is that even while it breaks new ground, “changes the world”, builds robots that are supposedly more intelligent than humans and disrupts entire industries, it all begins in a typically awkward, typically human, you might even say typically British fashion.
“Go on, ask them!” “I can’t, I can’t, what if they say no”. “But we’ve got nothing to lose, we’ll be out of funding runway in two weeks”. “Reputationally we still have something to lose, what if I make an idiot of myself and they tell all of their investor friends?”
And so another opportunity to raise funds goes begging. Founders may be brilliant leaders in their own way – great coders, respected by their peers, visionaries, but to a man they don’t want to lose face in front of their team by approaching an investor who possesses the length of tooth and depth of pocket to make them look silly by asking trough questions or simply turning on their heel and without so much as proffering a business card.
Founders are like Richie Cunningham, and every Richie Cunningham needs a Fonzie. Think of your lead investor as The Fonz. Picture him in a leather jacket with a quiff so gargantuan it would make a pro surfer feel queasy, if it helps.
Lead investors are cool – leather jacket and motorcycle cool – but crucially, they appear to have an inexplicable fondness for geeky groups of beta males who rarely talk to women and whose offices smell of Cheetos and bong water. Startups, in other words.
The Fonz can mix it with the big boys, just as a lead investor can mix it up with his fellow investors – indeed, at meetings of angel investor syndicates he is first amongst equals. Wherever he decides to lay his hatful of wonga, obtained from some other career that nobody can quite imagine him ever having really had, doing goodness only knows what, who knows where, hi fellow investors follow.
The lead investor is nothing so much as a kind of shape-shifting social butterfly, as comfortable scrutinising a cap table over a kitchen table in Dalston as he is hammering out share options at the sharp end of a boardroom table. Why does he do what he does. Nobody knows.
Is he in it for the money? He could be. Maybe he’s skint. For the thrill? Perhaps the knowledge he can bend anyone to his will has lost something of its sheen. Is he single, married? Nobody has ever plucked up the courage to ask him. What does he do at night? He waits.
The reality of the show Happy Days, as everybody knows deep down, and has been borne out in real life by the freckly ginger stereotype defying serial success of Ron Howard, is that Richie Cunningham is the real leader of the pack. The cards are stacked in his favour – he represents domesticity, apple pie, and safety first. But first he must prove himself – he needs an enabler.
And so it is in the startup world. The founder is the one that makes it big – the lead investor is the one who makes it happen – but the limelight is not for him. He is too maverick, too other wordly, too downright bizarre. Why would someone with money associate with and encourage rich men to give their money to poor ones. In the world of the High Net Worths, it’s against nature.
And yet that is precisely what he does. There is no funding without a lead investor, just two awkward groups of men and men-children with nothing in common except the Hoxton Hotel and an opportunistic PR girl or two (female founders, please reverse the previous analogy).
A lead investor redresses life’s balance. He puts David and Goliath together and Julie Meyer is fond of saying, makes them dance. And perhaps that is what truly motivates the lead investor. Just as nature abhors a vacuum, a lead investor abhors social awkwardness, or the oppression of the skinny jean-ed by the three-pieced. Perhaps he just wants to see a fair fight.
And when it’s over? When the term sheets are signed and both the investors and the startup founder head off back to Surrey together, the founder breathing an enormous sigh of relief and thinking “Jesus that was close, I almost had to live on a barge! My folks will be delighted to see me again”, what then, of the lead investor.
Does he ride off into the sunset with a laptop bag full of money? Take a hotel room in Mayfair, ditch the deodorant and wait for the painted ladies? Dream of the Elysian fields on his farm as he waits to be reunited with the family the tax-romani took from him with cruel swipes of their ballpoint.
If they ever make a film about a lead investor, he will be played by Russell Crowe.
“My name is Maximus Decimal Placimus, commander of the barmies of the Northern line, General of the Felix Capital and loyal servant to the TRUE founder, Bark-us up the wrong trees-ius. Father to a butchered pun, husband to a financially unburdened wife. And I will have my vesting schedule, in this deal or the next.”
The film will be shot in black and white, film noir style, and it will be called: Motivation unknown.
The lead investor is the single most important player in the start-up / Venture Capital ecosystem.