Quelles stratégies pouvez-vous utiliser pour gérer les conflits entre investisseurs lors d’une ronde de sortie ?

All parties should be encouraged to express their perspectives and listen empathetically to the views of others. Finding common ground is crucial in resolving conflicts. Exploring different scenarios and alternatives can also help in conflict management. By examining various possibilities, investors can evaluate potential outcomes and trade-offs. Reminding investors of the shared interest in achieving a successful exit can help refocus discussions towards the bigger picture and prevent disputes from escalating. Ultimately, managing conflicts between investors requires a combination of effective communication, mediation, finding common ground, exploring alternatives, and maintaining a focus on the collective goal.

At the end of the day, you “make your bed” when you take money and define the terms for each successive rounds of funding. Unfortunately, in the heat of closing a deal, the issues created by terms requested by new investors are often overlooked. So accepting a 2 times preference and participation may make sense to get funding in round 2 but, unless your company is a rocket ship, it is doomed to create conflicts between investors of round 1 and 2 for example if an early exit needs to be contemplated and leads to a poor outcome for round 1 investors.

Right Communication , with Rational , and on Time Communication is the key to success. One must resolve the concerns and express that you are available to support even after exiting.

Facilitating open communication to prevent misunderstandings and align expectations are key. Understanding each investor's perspectives is key to finding common ground. In cases of significant disagreement, involving a neutral third party for mediation can be beneficial. Encouraging compromise and negotiation, while leveraging the expertise of legal and financial advisors, helps navigate complex situations. It's important to remind all parties of the value of maintaining long-term relationships beyond the current deal. Additionally, setting clear guidelines and processes for exit rounds in advance can reduce potential conflicts. These approaches contribute to a smoother and more successful exit process.

Effective conflict management in exit rounds requires clear communication and transparency. Presenting a unified exit strategy with data-backed rationale helps align investor interests. Utilizing third-party mediators for neutral perspectives can be invaluable in negotiations. It's also crucial to understand each investor's motivations and exit goals, facilitating tailored solutions that address diverse expectations. Finally, having well-defined exit clauses in initial investment agreements can preemptively mitigate potential conflicts, ensuring a smoother exit process. These strategies, grounded in openness and strategic foresight, are key to harmonizing investor interests during critical exit rounds.

In 2023, Stripe CEO Patrick Collison exemplified this principle during their $64B funding round. He proactively engaged investors throughout the process, clearly outlining Stripe's global expansion vision, specific milestones, and potential exit scenarios. Collison did not just inform investors, but actively sought their input. He held investor roundtables, incorporated their feedback into the exit strategy, and addressed concerns head-on. Stripe's open communication resulted in a smooth and successful exit round, avoiding potential conflicts and misunderstandings that could have delayed or jeopardized the process.

In my experience, communication is essential to resolve conflicts between investors especially when it comes to differentiated rights among the investors on the basis of either capital or seniority of investment. It must be ensured that one set of investor is not benefitted out of other investors. Conflicts can be between major and minor investors, existing and new investors and between lead and member investors. Promoters must ensure that the investors are clear with the terms of the investments, in particular with respect to the rights, responsibilities and exit.

Managing conflicts between investors during an exit round is a delicate yet crucial aspect of entrepreneurship. Drawing from my experience, the key lies in clear communication and alignment of interests. Start by understanding each investor's expectations & exit goals. Open, transparent discussions about these objectives can often preempt conflicts. When disagreements arise, prioritize mediation and seek common ground, focusing on mutually beneficial solutions. It's important to revisit & leverage the terms laid out in initial agreements, using them as a framework for negotiation. Conflict resolution is the ability to balance differing perspectives while keeping sight of the overall goal; a successful and fair exit for all parties involved

Not all investors are the same : different risk appetite, a range of ROI to fulfil, some are short term while others are in it for the long run. So you just need to understand what they are trying to achieve and see if you can balance out the differing needs of each investor

Beyond individual preferences, consider the broader investor ecosystem. Public market investors, for example, might prioritize near-term liquidity and predictable exit timelines, while private equity firms may be more flexible on timing but focus on maximizing valuation multiples. Mapping investor preferences to their category can inform your exit strategy and communication approach. Develop a comprehensive investor profile for each stakeholder, outlining their preferred exit type, ideal buyer profile, and potential deal structures. This profile can be a valuable tool for scenario planning and anticipating potential objections during negotiations.

Utilize game theory principles to anticipate potential negotiation tactics from investors. Understanding their leverage points, such as voting rights or liquidation preferences, empowers you to prepare counter-offers and navigate power dynamics. Additionally, consider employing negotiation frameworks like BATNA (Best Alternative To a Negotiated Agreement) and ZOPA (Zone Of Potential Agreement) to set realistic expectations and identify win-win solutions. Consider employing phased negotiation stages. Start with high-level principles and gradually delve into granular details. This phased approach allows for iterative feedback, builds trust, and prevents early disagreements from derailing the entire process.

consider diversifying your expert team beyond traditional legal and financial advisors. Engaging industry specialists, communication consultants, or even experienced entrepreneurs can offer valuable insights specific to your sector and negotiation dynamics. A holistic approach to professional support can significantly strengthen your exit strategy. Explore alternative dispute resolution methods beyond traditional mediation or arbitration. Consider collaborative negotiation techniques or facilitated dialogue sessions, which can foster trust and creativity in resolving conflicts.

To manage conflicts between investors during an exit round, emphasize open communication, engage in mediation, utilize legal counsel, maintain transparency, negotiate diligently, establish pre-exit agreements, respect fiduciary duties, seek investor input, prioritize fairness, and focus on long-term goals. These strategies help align divergent interests and facilitate an amicable resolution.

A good quality advisory team should be able to sort these issues and also expectations should have been set before the exit process even starts, however circumstances and people can change

When considering exit options, professional advisor support is imperative. Specialist corporate finance, investment banks, lawyers and advisors indeed provide an impartial and holistic viewpoints. Existing investors may have their own interests, but advisors can and should provide comprehensive options on all exit options.

Go beyond a simple party. Consider hosting an "investor summit" featuring industry experts, sharing insights on future trends, and offering exclusive investment opportunities in your next venture. This proactive approach strengthens your network, positions you as a thought leader, and potentially attracts future funding. Quantify the impact of investor contributions. Share how their funding enabled specific milestones, product launches, or market expansions. This data-driven approach adds credibility to your gratitude and showcases the tangible value investors bring to your journey. Consider inviting external stakeholders, like media or industry influencers, to your celebration. This will strengthen your brand reputation.

When talking about board of director roles or similar positions, I like to repeat the phrase: "𝗲𝘅𝗽𝗲𝗰𝘁 𝗰𝗼𝗻𝗳𝗹𝗶𝗰𝘁𝘀, 𝗮𝗻𝗱 𝗽𝗿𝗲𝗽𝗮𝗿𝗲 𝘁𝗼 𝗿𝗲𝘀𝗼𝗹𝘃𝗲 𝘁𝗵𝗲𝗺". Unfortunately it is not an easy skill to develop. A few people may have it naturally. Conflict resolution and mediation is a 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹 "𝗽𝗼𝘄𝗲𝗿 𝘀𝗸𝗶𝗹𝗹" that everyone should learn and develop in live. Negotiation skills will also be helpful.

Managing conflicts between investors during an exit round requires clear communication and collaboration. It is essential to establish a written exit plan early in the investment process, clearly defining valuation expectations and potential exit routes. Additionally, developing a conflict resolution mechanism, fostering open communication and transparency, promoting a culture of collaboration and shared goals, and seeking professional guidance when needed can help manage conflicts effectively. By implementing these strategies, entrepreneurs and investors can navigate the complexity of the exit process and ensure a fair and amicable resolution.

Communication specifically on the expectation on the outcome should be clarified early on. Boards tend to leave it to late then the conflict creeped in already. Get the expectations cleared out early .