Investor-startup Communication during Lockdown

In the past few weeks we read many articles on how to crisis manage your portfolio, if you are an angel investor. In reality however the relationships between individual investors and startups differ (a lot).

During lockdown we talked to four angel investors and one VC fund. The core question we were asking was who called whom, to report updates and maybe ask for advice. We learned that the rate of communication among investors and startups during this crisis depends on:

1. Founders’ personality

After mid-March lockdown, investors reported they have been waiting for startups to call. This often didn’t happen. According to one investor, founders aren’t average people which means, they tend to have many crisis management ideas of their own. They also have frequent interactions and come in contact with different opinions. They are competent to make their own decisions. The same investor also told us that this independence and confidence is his key criterion when deciding to invest. “The best founders are those who know when to ask for investors’ opinion. This shouldn’t be too frequent, a balance has to be found. I like it when founders seek my advice with a few action proposals and we brainstorm about which action to take, or even come up with a completely new solution together.”

Another investor speculated that the reason founders aren’t reaching out to him is simply because they are afraid to show, they can’t do things independently, or are afraid to put too much burden on their investors. “But this isn’t OK, I would be happy to help!”

2. Startup maturity level

One investor told us he was positively surprised that founders from both his portfolio startups called to discuss the current situation and report impacts on business. In his observation this could be due to the fact that the two specific founders have on average more experience with investor communication. They probably also had more business relationships in the past and this resulted in open, transparent communication.

Fil Rouge Capital, the Croatia based VC fund mentioned one other aspect of when founders might seek investors’ advice more often. Their fund invests primarily in early stage startups which are still in the product/service development phase. If these startups spend cautiously and keep their teams small (delay hiring new talent), they “are equipped to survive a long winter.” “The maturity level of our portfolio startups is why many founders did not seek our advice in the past couple of weeks during lockdown”, says Julien Coustaury from Fil Rouge Capital. His advice to all founders who did reach out however was to be frugal and spend less, since raising next rounds in the near future will possibly not be easy.

On the other side of the spectrum we have startups in business development phase with large sales teams and possibly operations in the most negatively impacted industries such as tourism. We found that founders from these startups more often reached out to their investors, compared to the early stage startups.  

3. Reporting frequency from the investment contract

Much also depends on the contractual or verbal agreement before the investment is made. Some investors wish to be very involved whereas others wish to keep distance. Venture funds often invest in many startups and it would take a lot of work to service each individual startup during every crisis they encounter. At Fil Rouge Capital they follow the contractual agreement and discuss founders’ challenges during quarterly reporting. On top of that they keep their doors open for founders to reach out at any time. “We always answer their calls but never chase founders ourselves. If they don’t call, we assume they don’t need us,” says Julien.

We also found that founders more frequently discussed challenges with their lead investors compared to the entire investor syndicate.


All individual angel investors expressed they would like to hear from their portfolio startups more often. “I have no intention in participating in day-to-day operations but I am happy to help with big decisions, where my expertise might be very useful”. One investor even reported calling all his portfolio startups after a couple of weeks in lockdown himself. “I was curious what was going on”, he says. “Only one founder called me and asked for advice since he was in the middle of closing a fundraising round. After I called everyone else I learned the majority figured out how to manage crisis independently.”