Not Every Investor Becomes Your Partner

After more than two decades building five companies, I've learned a crucial truth: not every investor will become your partner. This isn't a problem—it's simply reality. What matters is understanding the context and choosing wisely.

The foundation of any investor relationship lies in understanding their motivation, something entrepreneurs too often overlook. This understanding sets the tone for everything that follows.

The Angel Investor: Beyond Capital

When entrepreneurs first seek funding, they typically encounter Angel Investors. The term "Angel" carries connotations of protection and support, originating from Broadway theater where it described patrons who funded productions that would otherwise close. The business world adopted this term around 1978 for investors supporting early-stage companies.

True Angels are typically retired entrepreneurs or executives whose motivations extend far beyond financial returns. They seek to stay connected to emerging business developments, mentor the next generation of entrepreneurs, and leverage their experience and networks in meaningful ways. Angels offer capital plus feedback, advice, and invaluable connections.

However, be wary of consultants who "invest" their expertise and network in exchange for equity. This arrangement rarely makes sense due to the disproportionate value exchange. Remember: never trade your equity for work—it's your most valuable asset.

I've learned to be selective about these initial connections. Not every angel investor you meet will align with your mission. I've had angels who never showed interest in the company's progress, never attended a single meeting. One mistake I made was allowing personal relationships to influence investment decisions—letting decades-long friends invest as angels. Don't mix these worlds. Your friends may not be your best business partners.

Venture Capital: A Different Motivation

The almost vocational connection that characterizes Angel relationships differs fundamentally from Venture Capital investors. VCs are professionals focused on growing capital for themselves and their Limited Partners. They're not chasing dreams or necessarily trying to transform industries or impact thousands of lives. They assess opportunities through a financial lens, seeking maximum returns.

This profit focus doesn't make them cold, but it means they evaluate opportunities differently than entrepreneurs do. In Brazil during 2023, over 8,000 angel investors allocated just over R$880 million, while in the United States, more than 420,000 individuals allocated $18.6 billion.

Active vs. Passive: Finding Your Match

The market often categorizes investors as active or passive. Active investors serve as advisors or consultants in specific startup areas, while passive ones let time shape the business. However, I've observed something more important: connection with purpose.

Some investors get genuinely excited about your dream and vision, going beyond board meetings to engage hands-on. These are the ones who truly make a difference—because they become your partners.

Choosing the Right Partner

This raises a critical question: What kind of investor do you want by your side?

Many entrepreneurs focus on fund reputation, investor prestige, or total capital under management. While these factors matter, they often overlook something equally important: the synergy between investor and project—and with you personally.

Life teaches us that differences make us grow, not similarities. But these differences should align with a long-term vision, enriching the dialogue over time. When fundamental differences never align, they become problems. Statistics show that 7 out of 10 companies don't survive shareholder disputes.

There's no definitive formula to avoid this beyond wisely choosing your partners and defining conflict resolution mechanisms upfront.

A Cautionary Tale

Once, a co-founder confronted me directly: "Our problem is that you're in the wrong business. You want to build a company, and I want to raise capital."

In that moment, everything became crystal clear. We were fundamentally misaligned—I was focused on building something meaningful while my partner was obsessed with fundraising cycles and all the glamour he believed came with that world. I was pushing the company toward sustainable growth; he was calculating the next capital raise. The gap wasn't just philosophical—it was unbridgeable.

After that meeting, I packed my things and left the partnership. Sometimes the most important business decision is knowing when to walk away.

The Bottom Line

Stay alert and stay open. Ask potential investors why they're interested in making the investment. If their answer strays too far from what you believe is essential for sharing your project—don't take the check.

Entrepreneurs are survivors, relying on resilience and fierce dedication to thrive through the transformative journey ahead. The combination of resilience and dedication often determines the line between success and failure. The critical question is: how committed are you to this journey, even if it demands significant time and financial investment without immediate returns? While money can be regained through hard work or new opportunities, lost time is irretrievable. This is the true cost of the entrepreneurial journey. 

Creating a company from scratch, breathing life into an idea, is one of the most exciting yet solitary endeavors an entrepreneur can undertake—even when done alongside partners. This journey is deeply personal and non-transferable. You won’t be able to fully convey its essence to others—only the insights and lessons you’ve gained along the way. These lessons are shaped by your starting point and how you manage your emotions. It will undoubtedly transform your perspective on everything around you, and this change will be irreversible.

Maintaining an open mind requires constant effort and self-awareness. Every entrepreneur navigates this monumental challenge differently, experiencing the intense and unpredictable process of creation in their own way.

In many ways, I believe this endeavor represents one of the most profound and transformative experiences in a professional life. It offers opportunities that a corporate career simply cannot: the courage to face uncertainty, adapt to change, and embrace the unknown.

For me, this journey began in 1999, at the age of 30. It was somewhat later compared to millions of young people who had the opportunity to embark on this path earlier, driven either by dissatisfaction with a small part of an existing process or by the desire to create something new and impactful. At that time, startups as we know them today were rare in Brazil, and there was virtually no venture capital market to support them.

This was a challenging period for venture capital in Brazil, as the country largely missed the early part of the internet boom. Despite the global excitement and the transformative potential of the internet, Brazil faced significant barriers that prevented it from participating fully in this wave of innovation. The burst of the internet bubble brought widespread challenges, but Brazil’s struggles were compounded by deep-rooted economic issues, including high inflation rates and a lack of legal structures to support venture investments.

According to data from ABStartups, in 2000, there were fewer than 500 startups in Brazil. This scarcity reflected not only the economic and structural hurdles but also a cultural environment that was still in the early stages of embracing entrepreneurship and innovation. The absence of a robust venture capital ecosystem further hindered the growth of startups during this critical period, leaving Brazil to play catch-up in the years that followed.

I believe that the idea of a mystical market, where starting a new company is seen as an automatic path to success and greater prestige, often contrasts with the reality many entrepreneurs experience—where success is far from certain and hitting the jackpot is unlikely. For me, the real value lies not in the financial rewards, but in the lessons gained along the way.

From my experience, both then and over the years, I’ve earned some key lessons:

1. Persistence is undeniably valuable, but it’s also fair to acknowledge that luck can play a part in success. There’s no harm in recognizing that luck often influences many success stories. However, it’s persistence that quietly steers the journey. This is truly essential, as it’s persistence that helps you gracefully navigate challenges, thoughtfully reconsider old beliefs, and, over time, transform your idea into a flourishing, multi-million dollar business.

Sara Blakely, the founder of Spanx, is an exemplary case of how persistence can lead to success. She spent years perfecting her product, facing rejection from multiple manufacturers and investors. Despite the numerous setbacks, she remained determined to make her shapewear vision a reality. Her persistence eventually paid off when she found a manufacturer who believed in her idea and helped her bring Spanx to life. However, things truly started to take off when luck played a key role: Neiman Marcus was looking for new suppliers, and they gave her  the opportunity to test her products in their stores. This was a pivotal moment for Spanx. The product quickly gained traction, fueled by word-of-mouth and media exposure, including a major boost from an appearance on Oprah’s Favorite Things in 2000. While Blakely's hard work and persistence were crucial, it was also the right timing and key connections that allowed her business to truly flourish. Sara Blakely ultimately sold her company for $1.2 billion in 2021, demonstrating how persistence, combined with the right circumstances, can lead to monumental success.

“When I started SPANX I had a “lucky” red backpack. It was always with me. I took it to Neiman Marcus when I first pitched my product. It was with me on every sales call, every press interview, and was even my go to bag when I launched Spanx Internationally. I’ve had the backpack since college and truly believe it’s lucky…” Sara Blakely - 11/27/2018

2. You can’t do it alone. It’s important to surround yourself with people who are smarter than you. This idea should be complemented by the understanding that these individuals must share your core values—even if they have different perspectives on how to approach things. Sometimes, we make mistakes. Driven by emotions, we may place our trust in people who don’t share our values. Don’t waste time working with those whose values differ from yours; this is non-negotiable. In this process, seek out those who complement your skills and inspire you to grow, but never take shortcuts. Strong partnerships are built on shared values and complementary skills. If you find yourself in a misaligned partnership, address it quickly. Choose partners you can trust for life.
Also, keep in mind that business will become a significant part of your life and will demand much of your time. It’s crucial to understand that everything will intertwine with your personal life. The person who will support you through the tough moments is the one with whom you share your dreams—the one you choose to walk through life with. Choose wisely.

“A founder's individual characteristics are important but what's more important is that person's ability to bring a bigger and more experienced team with them," the researchers say. "And the bigger that team the more likely the firm will succeed.”" Forbes, 11/04/2015

3. Celebrate every win, no matter how small. Each achievement is a step forward toward your shared goals and deserves recognition. While it’s easy to focus on the big milestones, it’s important to remember that every great accomplishment is built little by little. Take a moment to appreciate each part of your journey. Success isn’t just about reaching the finish line; it’s about the path you took to get there. Don’t let success blind you to the opportunity to inspire and help others with what you’ve learned. Turn your experiences into something valuable, and even a source of inspiration, for those around you.

4. Be optimistic and disregard the naysayers. Let go of any masks and embrace your beliefs. Successful entrepreneurs aren’t necessarily more intelligent than you, but they are often more optimistic. They don’t have all the answers, and there’s no magic formula or extraordinary powers. Success comes from persistence and belief in something others may doubt. The world is full of people with reasons not to try. Understand your risks and follow your beliefs—don’t waste time listening to naysayers. Stay true to yourself.

Entrepreneurship is a continuous act—a science of daily self-reinvention to move forward. This unique characteristic sets entrepreneurs apart from the rest. People aren’t born entrepreneurs, but once you embrace the journey, there’s no turning back. More than a calling, entrepreneurship demands a steel stomach and relentless drive. But I can assure you it worthwhile in many ways. For me, is understand that everything you see and use was created by someone like you that insist to change and improve other people experience. And there is nothing more rewarding than experience other people be impacted by your creation.