> If VCs don’t own a majority stake what authority do they have to make you chase such huge returns at the cost of a stable and profitable business? Disputes w

> If VCs don’t own a majority stake what authority do they have to make you chase such huge returns at the cost of a stable and profitable business? Disputes with investors about the direction of the company are rare. Disputes about how exactly to aim that direction happen often. In my own experience, VCs and large investors have this leverage: * Future investment. A major investor pulling back or not participating in the next round usually will result in worse terms, lower valuations or, the round not happening. * Legal issues. Investments come with terms and conditions, and they are rarely, here's $5m, do what you want. * Restructuring. From time to time, you need to have investors be on board with restructuring debt or the company. If you are at odds with a major investor, they are a whole lot less likely to be helpful. * "We'll make it hard for you" Everything from investing in competitors, to introducing key people to job opportunities to guiding customers elsewhere. Yes they have a fiduciary duty, but when they think that duty requires management to change direction, things can get ugly. Finally, investors talk to each other, and you piss one off, and they will poison the well with many others.