The Truth About Taking Money From An Unscrupulous Investor

While noncommitted co-founders are problematic, toxic investors are dangerous.

In 1998, I co-founded a startup to develop the first digital video streaming platform for security purposes.

The company flourished as the leading investor and CEO was a French chef who made his fortune flipping restaurants after the 1996 Atlanta Olympics—an old-school businessman from working-class Europe who wanted the final say in any company he backed.

My business

This investor had a majority share of the company and let everyone know it anytime he was unhappy with our performance. Failure to close a deal, having a bug in the software, or misunderstood instructions can lead to an angry lecture. Closing with the statement, "It's my business."

Rod Stewart

This investor had a problem with infidelity. I was not aware of this until talking with a female salesperson who casually mentioned she had slept with the boss on more than one occasion. Later, the investor told me of other exploits with women in the office.

Like 80s Miami

A few months after the product launch, the head of sales, myself, and this investor celebrated our speedy revenue growth. Taking his BMW 750, we experienced Atlanta nightlife until early morning, then drove back to his suburban home. Surprisingly, he quickly offered illegal substances like hors devours.

Sobriety

Being one year sober, I left the party disappointed and free of substances. As a 25-year-old engineer, I lived a somewhat sheltered life, with college keg parties being the craziest things I had ever done.

Death threats

I walked into his office and devised an alternative plan, angered at his planned exit strategy. Pulling open a desk drawer, he withdrew a revolver. "This is my company, and I will do what I want. If you do not like it," he said while placing the gun on his desk. Knowing he was probably high, I backed down.

Conclusion

The investor in question was very generous at times, loaning me his car for dates and providing business guidance during my mid-twenties. However, his drug use and lack of self-control made him dangerous for the company. While most investors are not like this, strange situations can arise for a young entrepreneur seeking funding.

Hope this helps

- Todd

I desire to help companies scale with investment, advice, and support. If you need help, have a question, or are seeking funding, email me at [email protected].