Not Just Investor

Why Founders Need Entrepreneurs on Their Board

Startups love raising money. Funding rounds, big checks, valuation bumps—it’s all part of the game. But too often, founders chase the biggest check without considering what else they’re getting from their investors.

Here’s the truth: The smartest founders leverage their investors for more than just capital.

As a business angel investing through Byte Brigade, I’ve seen it firsthand. Some founders actively seek guidance, tapping into the experience of their angel investors to make better decisions. Others? They ignore the people who can actually help them—until it’s too late.

Let me tell you a story about a startup that learned this lesson the hard way.

The Startup That Ignored the Hard Truth

A few years ago, I invested in a company that seemed promising. They had raised money, built a team, and were moving fast—until suddenly, they weren’t.

Growth had stalled.

Internal tensions between co-founders were rising.

And worst of all, they had hired too many people too soon.

The warning signs were all there. I wasn’t on the advisory board but received their summary deck from an investor meeting. After reading through it, one thing was painfully obvious:

🔥 They needed to fire at least half the team—immediately.

This isn’t a rare mistake. Many startups hire aggressively before they’ve validated growth. They assume that throwing more people at a problem will solve it. But when revenue doesn’t keep up, you end up with a bloated team, draining resources while doing work that isn’t moving the business forward.

I sent the founder a short, blunt message:

“You have too many employees. You need to cut your team before it’s too late.”

No response.

I figured they were busy putting out fires. But deep down, I knew what would happen: They wouldn’t act.

Six Months Later: The Same Problem, But Worse

Fast-forward six months.

They had resolved some internal conflicts, but they still hadn’t fired anyone. Instead, they had come up with a terrible alternative plan:

🚨 They stopped paying one of the co-founders and turned them into a part-time freelancer to “save costs.”

Rather than focusing on fixing their sales pipeline or product strategy, they decided to dismantle their ability to execute.

At this point, their situation was even worse:

❌ Burn rate was still high.

❌ Revenue had barely moved.

❌ They were running out of money.

I reached out again to the CEO. This time, we got on a call.

The Hardest Conversation for Any Founder

I told them exactly what I told them six months ago:

“You need to fire people. NOW.”

Their response? “Yeah, you’re probably right, but it’s really hard.”

Of course, it’s hard. No founder wants to lay people off. However, the bigger risk is keeping a bloated team while the company slowly dies.

Then they admitted something that explained everything:

💡 They had never fired anyone before.

It wasn’t just that they disagreed with me—they had no idea how to do it.

So I stepped in:

✅ I connected them with a great legal firm to guide them through the process.

✅ I explained how to make tough layoff decisions without hurting the company culture.

✅ I reassured them that acting now was the only way to save the startup.

And guess what?

👉 They finally did it.

It wasn’t fun, but it was necessary. And after making the cuts, they were in a much stronger position to move forward.

The Lesson: Business Angels Offer More Than Money

💡 Startups need experienced entrepreneurs on their cap table—not just investors.

Here’s why:

🔹 VCs and funds bring capital—but they don’t always bring hands-on operational experience.

🔹 Entrepreneurs bring real-world insights—because they’ve been through the same struggles.

If the founders had listened six months earlier, they would have saved themselves time, money, and stress. Instead, they waited until the situation was critical.

Founders often chase big-name investors and large checks, thinking that’s what will set them up for success. But what they often need most is guidance from people who’ve actually built something before.

Advice for Founders Raising Money

If you’re raising funds, don’t just optimize for the biggest check. Ask yourself:

✅ Who on my cap table can help me make hard decisions?

✅ Who has actually built and scaled a startup?

✅ Who will tell me what I don’t want to hear, but need to hear?

A strong network of business angels can be just as valuable as millions in VC funding. Not every problem can be solved by raising more money. Sometimes, what you need most is a hard truth from someone who’s been in your shoes.

Final Thoughts

As a business angel, I don’t invest millions. I wish I could. But I invest something just as valuable: advice, experience, and strategic guidance.

If you’re a founder, take a moment to look at the people supporting you. Listen to the ones who have been in the trenches. It might just save your startup.

What’s your experience with business angels? Have they been helpful, or do you feel they’re undervalued?