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IAM1997 – Author Offers a Unique Perspective on Founder-Investor Relationships

Podcast Interview with Elizabeth Zalman

In the world of startups, there's a delicate dance that takes place between founders and investors. Both sides have their own goals, perspectives, and expectations, which can often lead to points of friction.

But what are the underlying dynamics of this relationship? How can founders and investors better understand and navigate the challenges they face? In “Founder Versus Investor,” Elizabeth Zalman and Jerry Albright provide a candid and insightful exploration of the founder-investor relationship, uncovering the unspoken truths and offering valuable insights for both sides.

The founder-investor relationship is unique in the world of business. Unlike traditional loans or partnerships, the founder is not just accountable for the success of their business but also responsible for managing and appeasing the expectations of their investors.

This relationship evolves and changes as the company grows, and the stakes become higher. Misalignment, misunderstandings, and tensions are not uncommon, and it is crucial for founders and investors to navigate these challenges effectively.

The founder-investor relationship is a complex and delicate dance, but a deep understanding of its dynamics can lead to successful partnerships and shared growth. “Founder Versus Investor” offers a unique perspective on this crucial relationship, equipping founders and investors with the knowledge and insights they need to navigate the challenges and achieve their goals.

By fostering open communication, empathy, and a willingness to learn from each other, founders and investors can build stronger relationships and create thriving businesses.


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Full Interview:


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Elizabeth Zalman Teaser 00:00

And so as the relationship develops, there are all of these things that are not talked about, and there are tons of points of friction, right? Founder thinks the investor is an idiot. The investor has no idea why the founder is not listening to them. Both sides are right, of course. And we go back and forth on explaining why we behave the way that we behave throughout each of those life stages of the company.

Intro 00:25

Are you ready to hear business stories and learn effective ways to build relationships, generate sales, and level up your business from awesome CEOs, entrepreneurs, and founders without listening to a long, long, long interview?

If so, you've come to the right place. Gresh values your time and is ready to share with you the valuable info you're in search of. This is the I am CEO podcast.

Gresham Harkless 00:53

Hello. Hello. Hello. This is Gresh from the I Am CEO podcast. And I have a very special guest on the show today. I have Elizabeth Zalman. Elizabeth, great to have you on the show.

Elizabeth Zalman 01:01

Thank you, Gresh.

Gresham Harkless 01:03

Super excited to have you on and talk about all these awesome things that you're doing.

And of course, before we jumped into that conversation, I wanted to read a little bit more about this so you can hear about some of those awesome things.

Liz is an infrastructure and information security expert. She is a two-time founder and CEO of venture-backed companies, building the first to a successful exit and the second to a multi-hundred million dollar business.

Elizabeth has raised more than 100 million in venture capital from the most renowned investors in the world. She is a frequent speaker and guests at industry events and tech podcasts. In addition to being an investor and advisor herself. And she's also the author of the book Founder Versus Investor.

And I love the reason that she wrote the book. I was listening to an interview and I believe her and her coauthor actually connected over a blog post, which kind of, started to build their relationship. And of course, this books, I love the idea of connecting and networking through content and the content creation.

And I was also listening to an interview and she's just an absolute wealth of knowledge and one interview, she says something that's so practical, but it really hit home with me where she says, so many times you're trying to figure out, is this the best time to start this business? But she said, she tries to focus on the business she was building yesterday, the business she's building today, and the business that she's building tomorrow.

And I love the practicality of that and how impactful that is. And of course, I got. Throw in. She's a fellow dog owner. So who doesn't love their dogs and definitely expect the super awesome things. Thank you for being on the show. Liz, are you ready to speak to the I Am CEO community?

Elizabeth Zalman 02:27

Yes Gresh, thank you.

[restrict paid=”true”]

Gresham Harkless 02:28

Absolutely. So they kick everything off. I know I read a little bit about your bio and all the awesome things you're doing. So I wanted to hear a little bit more on what I call your CEO story. We'll let you get started with all the awesome work.

Elizabeth Zalman 02:38

I think my very first business actually was in college. I was going to school in Canada and I couldn't get a work visa. And so I started an eBay-based consignment business to keep me afloat before I graduated. And then a few years later, I started working for a startup that was founded by 1 of the inventors of instant messaging, 1 of the founders of ICQ from Israel.

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And so his next company was banner ads, remarketing, retargeting those ads that. Follow you around with the picture you just looked at on the gap. And so he started that company and I think I was employee 7 or 8 and worked there for 4 years. And then I turned to 1 of my coworkers and said, I think we can do better.

Why don't we start something? So we started our own ad tech company and raised a little VC money. Sold it four years later. And then I started my latest company, Strong DM which was the complete pivot, not in ad tech, but it was in infrastructure access management.

And then two years ago, I stepped down from Strong DM and I turned to actually, I think the blog post you're referring to Jerry, he's actually been an investor of mine for, I've known him for 13 years.

And so he wrote a blog post and I read it and I said, this is amazing. He was talking about boards of directors. firing founders and founders loved it, and investors of course hated it. But the commonality was that he was talking about something that nobody ever talked about except behind closed doors.

And that's why I got such a vociferous chorus of people saying, this is great or this is terrible. And so we decided to write a book about all of the things that people don't talk about unless it's behind closed doors. And that's where the book Founder Versus Investor.

Gresham Harkless 04:19

Nice. I absolutely love that. So I wanted to drill down a little bit more here, a little bit more about the book and all the awesome things you're working on with your company. Could you take us through a little bit more on how you're serving the clients you work with.

Elizabeth Zalman 04:29

So I stepped down from Strong DM two years ago, so I can talk about two years ago, Strong DM. The company sells infrastructure access management. So, I think for the layman, let's see, today, you might shop online and you can go and a website might ask you to create an account.

So, you can create an account with a username or password, you can create an account by linking Facebook or LinkedIn or Gmail or whatever your social login of choice is. That concept doesn't exist in enterprises for business. And so,Strong DM takes this, 1 account and allows staff members to log into databases or servers or a web application sitting behind a VPN or Kubernetes clusters or whatever without necessarily knowing usernames or passwords.

And I actually thought there's a lot I can talk about that. We did differently with respect to the customer and how we listened and how we ran support. But one of my most favorite stories from the company is actually something there were three founders and early on, right? The 1st customers of a startup or early adopters, and especially if they're paying, you want to make sure I wanted to make sure that that they felt listened and heard and totally respected.

And so we, every year started this tradition called founder cookies, and it's exactly what it is. It's founders bake cookies. For every single customer that the company has, and it started as, 10 or 20 bags of cookies, and the founders are all distributed. So we had 1 baking pod in the West Coast and 1 baking pod in the East Coast.

And then I think the last year that we did it, it was. The year before COVID hit. So 29, December 2019. We had a thousand bags of cookies going out. Sneaking little nips of alcohol in the mail, I think, probably illegally. And it was great because people, you put aside the product and you put aside the software and you put aside the service.

People remember the human touch, which I think can make all of the difference. And especially in the enterprise.

Gresham Harkless 06:34

Yeah, that makes so much sense. And I love that, you shared that you guys were all able to do that because I always say we forget about sometimes that human part of business. So is that a little bit of what kind of led or what that may be awareness or mentality is what kind of led you to writing this book of like understanding? These are things that people aren't talking about, but this is something that, fellow humans, other people want to know about.

Is that a little what led you all to write the book and what we can find in the book?

Elizabeth Zalman 07:01

I think the book goes back to the question if I am a startup and I'm a venture capital startup, then I'm taking a very particular kind of money. It's not a bank loan that I pay back across 30 years.

4 or 5 or 7. 5 points of interest today. It is a very specific relationship in which somebody is giving me money for a piece of my company. And the investor has one goal, which is a crazy outsized return. Investors are gambling, replacing 50 or 100 bets in a fund. And 1 of these essentially needs have a 1000 X return or 2000 X return in order to pay back the fund.

They're looking for 1 and the ace in the hole. And so along the way, along the growth of the company, and there are a number of stages, you have to find each other and then you fundraise and then there's. Terms to consummate the relationship and then there's a board of directors that you speak to quarterly, or maybe more frequently.

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And then there's a growth phase and then you exit. And so through all of these phases. The stakes change. The desires change. Founders need to shift into operators, for example, as opposed to just being a founder and in the nitty gritty and investors go from just having a small bet in you a million, two million bucks, having 20 or 30 or 40 million and you become the one that's going to pay back the fund.

And so as the relationship develops, there are all of these things that are not talked about, and there are tons of points of friction, right? Founder thinks the investor is an idiot. The investor has no idea why the founder is not listening to them. Both sides are right, of course. And so the idea behind the book is Jerry and I wanted to talk about this and we go back and forth.

So he fully embodies the investor and I fully embody probably the extremist founder in fairness to him. And we go back and forth on explaining why we behave the way that we behave throughout each of those life stages of the company. I don't think that I don't know that things will ever change dramatically, but at a minimum, both sides can go into the relationship, at least understanding a little bit more about the other.

Because what happens is when there are huge blow ups, typically, the founder can get fired or the founder digs in their heels and then the investor is just hung out to dry. And in all of these cases. It's the company that suffers and we're in this. We, the investor and the founder are in it in order to build a great company.

And so the idea is that if you can understand the other side better, perhaps we can have fewer points of friction, or maybe the amplitude of the friction is slightly less. So that the company can survive and ideally thrive. That was the idea behind the book.

Gresham Harkless 09:41


I appreciate you breaking that down. And do you feel like that's part of what I would like to call your secret sauce?

It could be for the book and be for yourself or a combination of both. But isn't that ability to bring up for lack of a better term holistic kind of awareness to this journey that the founders and investors go through.

Elizabeth Zalman 09:58

I think the only reason why I have this awareness, which is also imperfect at best any human is because I've been in this for 13 or 15 years.

So that just comes with time and hours, right? Not going to play pro tennis unless you're putting in 5000 hours a year. And so I think for me. My, my secret sauce to success, let's say, is that I will, I am shameless. I will not take no, it's not that I won't take no for an answer. I am shameless at getting to a yes or no.

I want to know whether we're moving forward on something or not. And that could be issuing an offer letter. It could be closing a sale. It can be getting to the end of an argument. I am supremely confident my boyfriend asked me all the time. He's you just wake up and you say, he's two years ago, you woke up and you said, I'm just going to publish a book.

And then there was the book. He was like, how did you know it was going to succeed? I was like, I didn't, but I knew that I wanted to put something out into the world. I had a general sense of what the shape and size of it needed to be.

And I knew something would come out the other side, whether it was a book with Jerry, my coauthor or haikus, I don't know, but something that's what I have confidence in is my ability to get something done.

Gresham Harkless 11:14

Yeah, that makes so much sense. So I wanted to switch gears a little bit and I went to ask you for what I call a CEO hack. So this could be like an app, a book or a habit that you have. It could be something from your book as well too, but what's something that makes you more effective and efficient?

Elizabeth Zalman 11:26

I could say something like. Making time for walks, they're getting up early to work out, but I'm going to save you that tired trope. You're going to laugh at this 1. I. So the backbone to my. Company's email was G, sweet email. I can't stand the Gmail web interface. I can't stand threaded messages.

And it makes it worse for me when I now also have Slack and there are text messages and there are zoom calls. And so I've created a single point of communication funnel and exists today, even in my personal life. It's email. If you need me to do something, you have to send me an email. And not only that, but the only email client that I will use is locally installed Microsoft outlook, not the 365 subscription locally installed because I don't like paying for constant upgrades.

And I will not go to bed. So inbox zero is a pipe dream. But what is not a pipe dream is keeping emails down to a single screen. So I will not go to bed unless I'm down to one screen on my laptop of emails. That to me is catching up. That has served me in good stead for a long time now.

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Gresham Harkless 12:39

Yeah, I can imagine that sounds amazing. So thank you for that hack.

So, what would you consider to be what I call a CEO nugget? This is little bit more word of wisdom or piece of advice. It might be, a nugget that you had in your book, but it's something that you would tell your younger business self if you were to hop into a time machine or potentially somebody going through the venture journey and trying to understand how best to get funding.

Elizabeth Zalman 12:58

I am a big fan of therapy, not a CEO coach not any sort of like mentor from a management perspective, but an actual real therapist. Sometimes it's better if they understand the jargon. Actually, maybe sometimes it's. It's better that they don't understand the jargon because they force you to speak more plainly.

But I'm a big fan of taking space from the work and trying to understand what's going on inside, inside my own brain.

Gresham Harkless 13:27

Yeah, I think that's so powerful. There you go. I love that. So, what would you consider to be my absolute favorite question, which is the definition of what it means to be a CEO and our goal is to have different quote-unquote CEOs on their show.

So, what does being a CEO mean to you?

Elizabeth Zalman 13:40

I see you in my eyes is accountability, right? So things that are good things that are bad. The shit stops with me. I don't I think at its core that's what it is. It's the person responsible for the health and. And future of the business and all of the responsibility attached to that title.

Gresham Harkless 13:59

Yeah, and I feel like accountability is such a powerful word.

Elizabeth Zalman 14:02

I think the priority my personal perspective is the prioritization independent of that. It's sort of like. As CEO, my job is to do access to lead the company into wherever I'm leading. It's a prioritization is a, is an implementation detail of how to get there, but, the CEO being responsible is how you show up in a board meeting, how you communicate to your.

Your staff, what do you do? If you have layoffs, given that it's not just impacting the people that work for you, but also their families and putting food on the table how you go to market, how you service the customer that says, I, you suck and I want to leave. That is right the buck stops here.

Gresham Harkless 14:42

Awesome. Awesome. Awesome. Let us truly appreciate that definition. Of course, I appreciate your time even more. So what I want to do now is pass you the mic, so to speak, just to see if there's anything additional that you can let our readers and listeners know.

And of course, how best people can get out of you, get a copy of the book, find out about all the awesome things that you're working on.

Elizabeth Zalman 14:58

I would say that. If you are, there are a lot of great business books out there about startups, how to grow a startup how to sell within a startup. And I would say that Founder Versus Investor is the 1 that will make you less naive about what the relationship is going to be.

So, if completes, I think, the quarterstone of the canon of books that exists out there today. So I would say if you're considering venture capital. Pick up that book so that at least you understand what you are about to get into and you go in eyes wide open.

Gresham Harkless 15:31

Yes, absolutely. And the best way for people to get a hold of the copy of the book.And, of course, get a contact with you.

Elizabeth Zalman 15:37

Just hit me up on LinkedIn and then the book wherever you like to purchase books. I'm a big fan of bookshop. org simply because. The order goes through your local bookstore and support small business as opposed to Amazon.

Gresham Harkless 15:49

There you go. Definitely. And we'll make it even easier by having the links and information to show notes.

We're also going to have a copy of the book I have right here in front of me. So also have it on our CEO bookshelf, but I love the book and I'm delving into it now. And I would even say even if you aren't going down that route, but you're even running a business, just having awareness around.

Quote, unquote, the other side of the coin or the other perspective is so powerful. So I love the book. And of course I love that you took some time out with us today. So Liz appreciate you. And I hope you have a phenomenal rest of the day.

Elizabeth Zalman 16:18

Thanks. I appreciate it as well.

Outro 16:20

Thank you for listening to the I Am CEO podcast powered by CB Nation and Blue 16 Media. Tune in next time and visit us at I Am CEO is not just a phrase. It's a community.

Want to level up your business even more? Read blogs, listen to podcasts, and watch videos at Also, check out our I Am CEO Facebook group.

This has been the I Am CEO podcast with Gresham Harkless Jr. Thank you for listening.


Dave Bonachita - CBNation Writer

This is a post from a CBNation team member. CBNation is a Business to Business (B2B) Brand. We are focused on increasing the success rate. We create content and information focusing on increasing the visibility of and providing resources for CEOs, entrepreneurs and business owners. CBNation consists of blogs(, podcasts, ( and videos ( CBNation is proudly powered by Blue16 Media.

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