We Really Wanted to Invest — But We Didn’t
A story about a promising startup, a tough call, and what founders often miss when raising capital.
There was a startup I really wanted to invest in.
The team had energy. The idea was smart. The space had real potential.
You could feel it — that early-stage magic when the pieces haven’t all landed yet, but the direction feels right.
We were close. But in the end, we passed.
Not because we didn’t believe in the people.
Not because the product was weak.
We passed because of the deal.
The offer was one-sided
When it came time to talk terms, something changed.
The conversation moved from shared vision to one-way ask:
“Give us your money. We’ll figure the rest out.”
There was no clear use of funds.
No roadmap for how we’d be involved.
No sense of how the business would communicate, measure progress, or invite support.
Worse, there was almost nothing in the agreement that reflected a fair return to investors.
No preferred returns.
No clear dividend structure.
No revenue-sharing option.
No detail on when or how investors might reasonably see anything back — unless a perfect exit happened years down the line.
It felt like we were being asked to write a cheque with little more than hope in return.
My business partner said it best
He looked at the proposal and said,
"They’re not offering much, are they?"
He didn’t mean the equity.
He meant the thinking behind it.
There’s a difference between raising money and building a real investor relationship.
And this deal didn’t show much of either.
It has to work on paper too
Early-stage investors don’t expect guaranteed returns. They know the risks.
But they also want to feel like their capital is respected — not just needed.
That respect shows up in the details:
Is there a path to shared upside beyond just a distant equity payout?
Are there any financial protections if things go sideways?
Will there be dividends if the business becomes profitable but doesn’t sell?
Is there a clear structure for how and when returns might be realized?
We weren’t looking for a perfect forecast. We were looking for signs of discipline.
Signs that the team had thought through how the money works — not just how to get it.
What’s a fair exchange between founder and investor?
Founders are often told not to “give away too much.” And I get it. Dilution matters.
But raising money without offering clear value in return isn’t strategy. It’s just short-sighted.
A good investor brings more than capital — support, perspective, networks.
And a good founder gives more than stock certificates. They offer a real role, real communication, and a fair path to returns.
If a deal only makes sense for one side, it’s not a deal. It’s a warning sign.
Investment is a relationship, not a transaction
Especially early on, capital is not just money. It’s belief. It’s alignment. It’s trust.
The best founder-investor relationships are built on shared wins and clear expectations.
You don’t have to give away control. But you do have to create clarity.
What does the investor get?
How will you treat their capital?
How do you see their role in what you’re building?
If those answers are fuzzy, you're not ready to raise.
We passed — and I still think about it
I genuinely hope that startup succeeds. The team had something.
But I also hope they learn what we saw:
Capital has to work for both sides.
If you're a founder raising money, ask yourself:
Would I say yes to this deal if I were on the other side?
Have I made space for investors to feel informed and involved?
Does the agreement show I’ve thought this through — not just sold a story?
Because good investors don’t expect guarantees. But they do expect to be treated like partners, not just chequebooks.