How To Manage Power And Trust In Relationships With Investors And Business Partners

By Roman Axelrod

The dynamics of personal relationships can make or break a startup. Even if a founder and investor or business partner start their partnership as the best of friends, myriad hiccups can occur along the way.

Sooner or later, most startups will face a power struggle and founders need to be ready for it. Playing by the rules of the game is paramount; only then can founders carve their own path. It’s akin to a pilot mastering the skies — experience breeds expertise.

Here are four valuable tips, which throughout my career have helped me balance power and trust when building fruitful relationships with investors and business partners.

No. 1: Don’t force your way

Partnerships work only when both parties can achieve more together than alone. And it might sound cliché, but you cannot build something great as a final result by focusing on achieving your personal goals. Steve Jobs learned this the hard way — his rigid management style got him ousted from Apple. But when he returned, a more collaborative approach helped him steer the company to unprecedented success.

Therefore, to get something for yourself — such as having your approach chosen for solving a particular problem — you must  remember that you’re part of the system and consider what advantages other members of this system and the system itself can gain. To do so, analyze their motivations and try to give each of the participants the desired value, when you can compromise.

No. 2:  Prioritize long-term goals

While collaboration is important, founders must remember that as the leaders of the venture they ultimately guide its direction. Their primary responsibility is to ensure the long-term success of the company. Compromises can help resolve conflicts, maintain relationships and drive progress toward shared goals, but they should never come at the expense of the business.

When partners push for drastic measures, such as laying off team members or selling off assets, it is key to stay firm against those suggestions that compromise long-term success. Using short-term metrics as the basis for decisions is not acceptable, as it will only increase uncertainty and undermine the team’s confidence in the founder’s leadership.

No. 3: Balance professionalism with warmth

While it’s essential to build trust, it’s equally important to maintain professionalism in all interactions. This balance allows for open communication without compromising objectivity.

Regular social interactions can strengthen relationships, but personal matters should be approached with caution. Avoiding excessive intimacy helps ensure that decisions remain focused on the business’ best interests, preventing any sense of obligation that could skew judgment.

Remember that for the relationship to be successful, the ongoing give-and-take needs to be in equilibrium. Let’s say that a partner helps a founder with a personal favor. This tilts the power scales, and they might later remind them of this, limiting their ability to protect their interests.

No. 4: Project strength and be honest

Successful entrepreneurs are resilient. As Richard Branson said, “For the first few years, it was all about survival.”

When dealing with investors and partners, founders must project strength to maintain equal footing, not deference. Approaching discussions with too much caution can shift the power dynamic and be difficult to reverse.

Always remember that while sugar coating may seem appealing, radical honesty from the start earns more respect. A clear stance — whether it’s a yes or no — establishes credibility. Transparency builds trust, and trust drives success.

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Roman Axelrod is the founder of XPANCEO, a deep-tech company developing the next generation of computing via smart contact lens with XR, zoom, night vision and health monitoring features. With three successful exits, he has negotiated and structured deals exceeding $5 billion and led teams of more than 4,500 people.

Illustration: Dom Guzman