I Am Not Your Friend
Shortly after we closed our financing round, my investor sat across the table from me, drinking coffee, and declared, “I am not your friend.” Uh, what?
As the CEO, you are ultimately responsible for everything involving your company. In many ways, it is all-encompassing. You embody and represent the company, looking out for its well-being and growth. You take actions as the company’s ultimate representative. You have a fiduciary responsibility to the investors to make decisions in the best interest of the company. That reality colors all of your relationships, because you cannot just leave your work role and responsibility. And you cannot forget that sometimes the relationship is not with you, but with you as “the company.”
That conversation with my new VC investor in the coffee shop over 15 years ago was illuminating. We had just navigated a difficult and contentious months-long negotiation and closing process involving many people, some heart-stopping and high-pressure moments, and repeated times when it was not clear that we would complete the transaction. Typically navigating such intense experiences collaboratively creates a sense of bonding and trust. I certainly felt that. I think we both felt a sense of relief that we had completed what he characterized as the most challenging closing he had done as a VC. And now, he declared “I am not your friend.” A statement that felt startling, dramatic, and even aggressive. I finished my coffee and spent some time thinking about what he meant.
After some introspection, I realized that he was making very clear that no matter what we had been through together, our relationship was “just business” He was a VC. I was CEO of one of his portfolio companies. And, as we had coffee in that coffee shop, he wanted to establish that we were business partners, not friends. We had no personal loyaty to each other. Being business associates is not a bad thing. In fact, it describes the vast majority of relationships we establish as we play our business roles. As a CEO, I am a boss to my employees, a manager to my investors, an organizational representative to my business partners, and so on. Business relationships are formed in the context of our business roles and responsibilities.
Business relationships are often best based on aligning common and complementary business interests. Between business leaders, these business relationships are founded on our roles representing and directing our organizations. For example, the managing partner in a venture capital fund and the CEO of a startup are in a business relationship. Similarly, the CEOs of two companies engaging in a strategic partnership are in a business relationship. In these relationships, we represent our organizations – with our organizational assets, liabilities, strengths, weaknesses. In a business relationship, we seek a win-win alignment of objectives, complementary strengths and weaknesses. To succeed together, we look for the overlap and alignment of interests and find ways to bind the organizations together, usually via formal contracts, in service of accomplishing some specific objectives. As a startup leader, even as we engage in friendly banter, it is important to not get confused, and start thinking that these relationships are personal. They are corporate relationships that are independent of who occupies a role at a particular time, and those obligations will survive a change in the people who hold the position. It is important to remember that if at some point you do not occupy the role you currently hold, those relationships that seem friendly now, will most likely smoothly shift to the next person occupying that chair in your company. It was not about you in the first place.
Relationally, it means remembering that we work together as long as our business’s interests align. If my job changes or yours does, the relationship between the organizations can continue, but possibly not the relationship between the people. Think of it this way, if, as CEO, I create a strategic partnership or take an investment, if I am no longer the CEO for whatever reason, it is my company that is obligated and bound, not me personally. The next CEO steps into my shoes and carries forward within the context of those business relationships. I have no ongoing relevance because it is my role (CEO) that has the relationship, not me personally. I am spelling this out because I have seen too many first-time CEOs not realize this truth and be terribly hurt when business realities set in or make mistakes by not formalizing and documenting the business relationships to survive a passing of the baton in a particular role. These business relationships are about the roles engaging independent to some degree of the people who hold them. Therefore, it is essential to think about binding the organizations together with contracts that are written to survive changes in the people representing them. Similarly, we should always remember that if each of us is doing a good job, we need to keep working to align our organizations’ interests as things evolve; otherwise, if they diverge, we may need to find a graceful way to let each of us go our own ways. Always try to leave a fair and high integrity path for exiting the relationship.
Looking back, honestly, the bluntness of that “I am not your friend” conversation was an important eye-opener for me. It caused me to recognize that warm and friendly interactions did not mean we had taken on the commitment to one another of a true friendship. It emphasized for me what “it’s just business” can mean and taught me to be much more aware and intentional about building appropriate and vital business relationships on behalf of my companies without letting personal feelings get in the way of doing the right thing for those companies — and all the associated stakeholders who depend on me to make clear-eyed decisions on behalf of the business. More times than I wish, I and others have had to make hard business decisions to part ways because of business requirements. I have been on both sides of those hard decisions, and, as CEOs, we have an obligation to our investors, our team, our suppliers, and our customers to make those hard decisions sometimes. In retrospect, I appreciate that VC who laid it on the line for me early in my startup career. He helped me grow up and see the reality. It indeed made it easier to navigate difficult times in business relationships without letting emotional connections get in the way. Remember, you can enjoy the warmth while never losing sight of the reality that almost always, these “business friendships” that are formed while you are in your business role are just business.
