The Secret VC: reframing the founder / funder relationship

I wish someone had told me earlier that venture works best when both sides stop pretending this is a courtship and admit it’s more akin to a partnership… with a prenup. I don’t mean that romantically; I mean it practically. You’re choosing teammates for seven-plus years, often through the ugliest parts of building. If that reality makes you queasy, then good. That’s your body telling you to slow down, ask harder questions, and make sure the people across the table are the people you actually want across the table.

Let’s start where founders and VCs both get tripped up: “trust me, bro.” 

I’m allergic. I don’t care about your alma mater, your last press hit, or a glossy intro from somebody “important.” Contrary to how some may have interpreted our last column, Pre-seed can absolutely be pre-revenue, especially in regulated spaces. But there still has to be something we can underwrite: that may take the form of structured customer discovery, usage signals, or stakeholder interviews we can check ourselves, through backchannels or directly. I like to think that I’m a pragmatic skeptic in this game: I’ll root for you, but I still need to verify your claims. If there’s nothing to verify, we’re both gambling blind, and that’s how you wake up in a podcast series “of the story behind” with some dramatic music.

Founders in the Midwest sometimes assume that the local reputation for pragmatism means we’re closet bankers. We’re not. Banks want predictability; venture capitalists finance uncertainty. Early revenue is nice, but it also doesn’t suddenly make you more bankable. Traditional lenders are looking for multi-year, stable income streams; you won’t have them yet. If you’re approaching a venture firm looking for funds, it should be because you need a partner who can underwrite risk that almost no one else will, not because you think a couple of invoices unlock a term loan. That’s not a contradiction; it’s the very nature of this particular asset class.

Clarity about what stage you’re at and what it means for those you’re talking to can save you a lot of grief.

At the Series A stage, the job is to scale what is already working. It’s the stage of “nail it, then scale it”. Pre-seed and seed are different: you have more questions than answers and so do we, and the work is about learning, iterating, and discovering whether you’re building the right thing for the right market. Product-market fit is notoriously fuzzy and AI has now made it even fuzzier, and yet the best way I’ve ever heard it described is that “you’ll know it when you see it.” Misreading these stage expectations is the root of so many broken conversations and disappointments.

Decks reflect whether you understand that difference. Personally, I don’t really understand the logic of multi-year future projections in a seed pitch, just like I don’t think a “checkbox” about competitors that magically crowns you best at everything. Do things that show me how you think. A matrix of where you sit in the market on two axes that actually make sense. An explanation of how you came to the conclusion of your particular solution, why your team is best placed based on experience and skills to succeed. Make it easy to understand. Tell your story well. Communication before you have proof of anything is your friend. These things tell me more about your strategy than ten bullet points of buzzwords. It’s not theatre; it’s thinking. 

This is where our relationship also starts to look like work, because it is. Like I said, I’m going to check the references you offer, but you should also backchannel me. Founders, listen closely: reverse diligence isn’t rude, it’s being responsible. Take me (or anyone from any fund) to coffee and try to learn the game: ask about reserves, decision-making, board behavior when things break, and how we’ve supported companies we didn’t lead. Flip the script with reverse-pitch interactions if you can. Signals flow both ways; your diligence signals competence to me, and my answers tell you what partnering with me will actually feel like in month 38.

Remember, it’s like a partnership with a prenup. Preferences and protections aren’t acts of hostility; they’re the venture equivalent of “let’s protect each other from the worst-case scenario.” I’ve seen too many founders interpret terms as moral judgments. They’re not. They’re risk-management tools for a long journey we’re agreeing to take together. The grown-up move - for both of us - is to negotiate openly, document clearly, and then get back to building. No “us versus them.” It’s us versus entropy.

Let me also talk about our regional reality for a minute. 

The Midwest has a lot going for it - talent, grit, real customer problems, access to a large local market - but our angel stack can sometimes get in its own way. ‘Pay-to-play’ groups with small checks paired to big-firm demands? That’s a mismatch. Good angels literally write their checks (big or small) on a vibe, they accept that most early bets won’t work, and they resist the urge to treat venture like real estate with quarterly comps. This game has a long feedback loop, and the failures usually show up first. If you can’t stomach that as an angel, then write fewer checks or pick a different asset class.

When founders encounter those mismatches, they do something rational: they go where the capital market fits the job to be done. I don’t take it personally when a team headquartered here raises elsewhere. I made the investment to help them win; if ‘winning’ requires a different capital stack, great. Then go get it. My job is to make sure they reach the milestones that unlock that next round, wherever it lives. The regional ego trip helps no one; the company needs what the company needs. Having said that, yes it would be great if we had more early stage capital and if we were able to write larger checks at a later stage. But that isn’t the founders fault.

So what does a reframed founder/funder relationship look like in practice?

First, we both show our work. You come with validation I can check, and I come with a clear articulation of how I support companies at your stage: what I fund, what I don’t, and how I behave when the plan collides with reality. You let me talk to customers or stakeholders you’ve interviewed; I let you talk to founders I’ve backed who’ve seen me on good and bad days. We both earn the right to move forward.

Second, we respect the clock. Early rounds are about learning efficiently, not predicting ten years of revenue to the dollar. Later rounds are about pouring fuel on a working engine. If you act like a Series A company at pre-seed - or like a pre-seed explorer at Series A - we’ll frustrate each other. Align the round with the job to be done, and you’ll find investors lean in faster because the risk you’re asking us to underwrite matches the capital you’re seeking.

Third, we choose candor over theatre. If your competitor matrix is a wish list, scrap it. If your business model is a crystal ball, drop it. Show me the variables that truly govern your market and where you realistically sit relative to peers. Show me the two or three cycles of customer learning that changed your roadmap. That’s the stuff that makes me think, “Okay, this team can navigate the fog.”

Fourth, we normalize reverse diligence. You’re not “lucky to get money.” I’m not “doing you a favor.” We’re trying out for a long season on the same team. Ask me the annoying questions now so I’m not surprising you later. I promise to do the same. And when you hear an answer that doesn’t fit how you work, don’t contort yourself—keep looking for a better-fit partner.

Finally, we learn the local rules - and when to ignore them. If the angel lane around you looks like a toll road with potholes, don’t drive it just because it’s nearby. Curate your cap table with people who understand that early-stage checks are belief capital, not control capital, and who won’t confuse a quarterly update with a dividend statement. If that means raising beyond the region, so be it. You’re building a company, not a museum exhibit for regional pride.

If all of this sounds surprisingly unsexy, that’s the point. The reframed relationship is boring in the best way: honest about risk, specific about stage, skeptical of theatre, relentlessly long-term. 

When we both behave that way, the legal docs feel less adversarial, the board meetings feel more like problem-solving than performance, and the inevitable rough patches feel survivable instead of existential.

I’d like to close with a confession. 

As investors, we sometimes contribute to the confusion because it’s easier to nod along at the polished deck than to ask for the messy customer notes. It’s easier to skim a five-year pro forma than to debate which variables matter in your market. And it’s easier to accept a warm intro than to encourage you to backchannel us. I’m trying to be the partner who chooses the more difficult, but better, version of those moments. Hold me to it. Then hold yourself to it. That’s how we build the kind of partnerships that deserve seven-plus years of both of our lives.