Today, we’re talking about competitive investments. Should founders be worried about them? Obviously, I am a biased investor, but here’s the main points:
1. Early Stage Investments
For seed, pre-seed and accelerator investments — these investors are so early they’re primarily betting on the founders, not the idea. Many companies at this stage pivot, so you probably shouldn’t be too worried about competitive investments in the earliest rounds.
2. Board Seats
If you’re at the Series A stage or later and an investor would be on both your board and the board of a competitor, that’s where potential issues might arise and it may not be worth the risk.
3. The Individual Matters
Ultimately, this is more about the person than any blanket policy. For example, Marc Andreesen was a great board member for Meta for 14 years, during that time his VC firm invested in 2 other social networks: Pinterest and Clubhouse.
Best of luck out there.
Sterling Road invests in idea stage and pre-seed B2B startups based in the US, Canada and UK.
