The most active investors sit on the board and can try and impact a startup through influence, but ultimately the management team is in charge...
“[Being cash flow positive] means you control your destiny,” he said. “Instead of being funded by your investors, you're funded by your customers.”
Every investor I spoke with started our discussion with some version of the same truth: Almost nothing in venture capital investing — particularly in early stages — is in your control. I asked all the investors I interviewed how often an investment goes “according to plan.” Unilaterally, they said never.
In the pursuit of investing in ideas that can “change the world,” finding the line between “white lies” and “real lies” can be tricky. One investor equated the regulatory issues at Theranos to those that Uber and Lyft faced against the traditional taxi industry. Investors continue to herald Uber and Lyft as great companies, even though in many cases their operations are breaking laws (as they’re currently written).
Unlike the public market which is regulated by standardized reports, metrics and third-party auditors, the early-stage private market is “built on trust” that required a heavy dose of skepticism...