In a non-control deal, an investor cannot fire management. Therefore, the primary diligence focus must shift from the business itself to the founder's character and the potential for a strong partnership, as this relationship is the ultimate determinant of success.

Eric Byunn of Centana Growth states that despite legal mechanisms, achieving a good outcome is nearly impossible without management team alignment. His firm's core principle is to never proceed with a secondary sale or exit if the founders are opposed, treating their partnership with management as paramount.

To ensure robust decision-making, Eclipse requires that if a partner feels strongly against a potential investment, they must join the deal team alongside the champions. This forces a direct confrontation of the risks and ensures that by the time an investment is made, all major concerns have been addressed.

To predict the future health of a partnership, intentionally have difficult conversations before any investment is made. If you can't productively disagree or discuss serious problems before you're formally linked, it's highly unlikely you'll be able to do so when the stakes are higher post-investment.

The ideal founder-investor dynamic is built on a shared, unique vision—like being "in on a secret together." When an investor deeply believes in a startup's specific approach, it fosters the trust needed for radical honesty about challenges, which in turn unlocks their network and resources for help.

Oshkosh avoids demanding a Right of First Refusal, which can scare off potential acquirers. Instead, they secure information rights and board observer seats. This ensures they are notified of any acquisition talks, allowing them to enter a competitive process without limiting the startup's exit opportunities.

When investing in competing late-stage companies, Coatue's policy is to inform the existing founder directly before the new deal closes. They explain their rationale but explicitly do not ask for permission. This approach of radical, direct communication prevents founders from hearing news secondhand and maintains trust, even in potentially contentious situations.

Deciding whether to back a competitor is fraught with conflict. When the speaker considered investing in Stripe, a Square executive called it a conflict, but CEO Jack Dorsey approved. This shows opinions on threats vary internally, justifying multiple checks before proceeding with a potentially conflicting investment.

Conflicts over selling a company often hide personal or firm-level motivations. Seth Levine of Foundry Group advocates for bluntly asking about these biases—like a VC needing DPI for fundraising or a founder needing personal liquidity—because you cannot solve a problem until it is openly acknowledged.