Not all investors want a seat at the table. Some want the whole room.
For every founder thrilled to close a major funding round, there’s another who walked away with capital and a problem: an overbearing investor, quietly pulling the strings behind the scenes. While venture capital is often framed as a partnership, in reality, it can become a power struggle — one that tilts sharply depending on term sheets, desperation, and in some cases, brute force.
In 2020, a British SaaS startup that had just raised its Series A from a well-known European fund found itself suddenly pushed to replace its CFO. The investor had no formal board majority, but used an advisory clause in the term sheet to “strongly recommend” a new candidate, one who had worked at two of their portfolio companies. The founder complied, wary of damaging the relationship.
A year later, the same investor blocked a secondary sale because it would dilute their control. The company was profitable, but momentum slowed. The founder later told Sifted: “We thought we’d brought in an ally. It turned out to be an operator.”
It’s not an isolated case.
In 2023, Tech.eu covered a growing dispute between a UK-based health diagnostics company and a US investor who had allegedly threatened legal action if the startup accepted acquisition interest from a competitor. The clause in question was buried in a “right of first refusal” term, standard in many early-stage deals. But the investor was using it as leverage to either force a buyout or block a potentially lucrative exit.
The founder chose to walk away from the deal entirely, fearing litigation. The startup eventually ran out of cash six months later.
This wasn’t illegal. But it was aggressive, and it raises a broader question: when does investor influence cross the line?
Some founders never see it coming. They assume governance means board meetings and reports. But control can come in quieter forms: veto power over hires, visibility into internal documents, or conditions tied to future funding tranches. These terms often seem benign until the company hits a rough patch.
In 2021, a leaked document from a Scandinavian venture fund showed how founders in one of their portfolio companies were pressured to shift HQs, change suppliers, and even alter recruitment strategies all within six months of funding. The justification? “Aligning with the growth plan.”
The result? The company’s senior engineering team quit en masse.
Not all investors operate like this. Many are fair, collaborative, and strategic. But founders often underestimate the sheer imbalance of power once capital is wired. Term sheets that look friendly in boom times can become weapons in downturns. “Founder-friendly” has become marketing language, and without legal scrutiny, it’s just that.
This is especially true in sectors where technical founders lack financial fluency. In a post-raise high, it’s easy to overlook clawback clauses, information rights, and covert preference structures. These aren’t just technicalities. They’re levers — and in the hands of the wrong investor, they’re pressure points.
The solution isn’t paranoia, it’s preparedness. Founders need better legal advice, earlier. More peer reference checks. And an understanding that due diligence goes both ways.
A cheque is not always worth the cost of control. And influence, once granted, is rarely taken back.
As investor dynamics shift in 2025 — with money tightening and risk appetites declining — founders must ask not just “how much are we raising?” but “who are we empowering?”
Because sometimes, the wrong investor doesn’t just fund your business. They take it from you.
At the heart of the collaboration between Australia and Britain lies a transformative Memorandum of Understanding (MOU), a document that not only signifies a strategic alliance but also draws upon the insights provided by a paper titled “The Landscape of the Quantum Start-up Ecosystem.” This work, by Zeki Can Seskir, Ramis Korkmaz, and Arsev Umur Aydinoglu, published in October 2022, stands as a guiding beacon for the collaborative efforts envisioned by Australian Industry and Science Minister Ed Husic and British Secretary of State for Science, Innovation, and Technology, Michelle Donelan.
The paper offers a comprehensive landscaping study that delves into the intricate dynamics of the global quantum start-up landscape. With a robust dataset encompassing 441 companies hailing from 42 countries, the authors illuminate the temporal and geographical distributions, categorisations, and evolving trends within the quantum start-up ecosystem. As the ink dries on the MOU, the integration of insights from their research becomes a cornerstone of the collaborative framework.
Essentially, the MOU transcends a mere agreement; it becomes a fusion of strategic intent and wisdom. The collaborative efforts between Australia and Britain gain depth and direction. The MOU, informed by the paper’s findings, propels both nations into a future where quantum technologies are not just explored theoretically but are translated into practical applications, fostering meaningful global advancements.
The MOU not only underscores the commitment to joint efforts but also seeks to leverage existing bilateral and multilateral science and technology cooperation frameworks. According to the paper’s findings, more than 92% of quantum start-ups have been founded within the last decade. The temporal and geographical distributions resonate with the collaborative vision of Australia and Britain, two nations at the forefront of the quantum revolution.
Australia’s quantum prowess is an example from the paper due to its global leadership in quantum technologies. The nation is home to several leading quantum startups, including Q-CTRL, Diraq, and Quantum Brilliance. Accordingly, these companies exemplify Australia’s dedication to commercialising quantum advancements. The recent backing of Queensland’s first quantum hardware startup further solidifies Australia’s commitment to quantum innovation.
As Australia and Britain join forces in the quantum revolution, the collaboration gains additional depth with insights from the study. The MOU’s principles now not only reflect a commitment to exploring the theoretical aspects of quantum technologies but also align with the categorised fields presented in the paper.
By leveraging existing frameworks and aligning with strategic initiatives, this collaboration seeks to propel quantum research and development on a global scale. Australia’s quantum prowess, coupled with Britain’s technological leadership, promises a future where the quantum frontier becomes a shared landscape of innovation, discovery, and progress.