As a founder, raising capital can be both exhilarating and intimidating. Interacting with investors—particularly seasoned VCs—can unearth insecurities that many of us didn’t even know we had. In high-stakes meetings, the pressure to impress can nudge founders toward defensiveness, leading to rigid thinking and an overly cautious approach to feedback. This phenomenon aligns with the concept of the fixed mindset, a limiting belief system that can quietly sabotage long-term success.
Founders are ambitious by nature, but insecurity can trap even the most visionary among us in the desire to prove we’re capable, rather than learn how to get better. This fixed mindset becomes more dangerous when amplified by the nuanced, competitive dynamic between VCs and entrepreneurs. But if founders and VCs collaborate to cultivate growth mindsets and psychological safety, they can unlock far more value—far beyond just the financial bottom line.
How Insecurity Drives Founders into a Fixed Mindset
A founder’s journey is often fueled by a deep sense of responsibility: the team, the product, the market, and the long-term dream rest on their shoulders. However, when pitching to VCs, insecurity can rear its head. Questions about strategy, product-market fit, or business model often feel like tests of competence. Many founders slip into a fixed mindset without realizing it:
- Over-defending ideas instead of engaging with feedback
- Avoiding vulnerability, making it harder to ask for help
- Focusing on being right, not learning
- Seeing VC criticism as a threat, not as an opportunity
This mindset can be insidious because it creates rigidity. Founders may resist change, double down on unproductive ideas, or over-index on short-term wins to “prove” their worth, all at the expense of long-term growth. In some cases, the relationship between VCs and founders begins to mirror a hawk-dove game—a competitive interaction where one party plays aggressively (hawk), and the other takes a more cautious or accommodating role (dove). This dynamic can reinforce unhealthy patterns if VCs are perceived as hawks and founders as doves, causing founders to respond defensively instead of openly.
The Hawk-Dove Dynamic and Its Impact on Founder-VC Relationships
The hawk-dove model from game theory helps illustrate how insecurity and power asymmetry affect founder-VC interactions. In this game, if both sides behave as “hawks”—aggressively asserting their positions—the interaction can result in conflict or stalemate. On the other hand, if both act as “doves” (passive or deferential), opportunities for meaningful engagement can be lost.
In VC relationships, this dynamic often manifests in the following ways:
- Founders may perceive VCs as hawks, leading them to adopt a defensive (dove) stance, which stifles constructive dialogue.
- Overly aggressive founders may push back too hard, damaging trust and making it harder to secure investment or valuable guidance.
- The imbalance of power can create a feedback loop, with VCs unconsciously adopting a more hawkish posture if they sense insecurity, pushing founders further into defensiveness.
This dance between hawk and dove not only creates tension but also reinforces a fixed mindset on both sides. Founders can miss the chance to learn from expert investors, while VCs miss the opportunity to foster a founder’s potential beyond just financial metrics.
Creating Psychological Safety: A Foundation for Growth Mindsets
Breaking free from this fixed mindset requires both sides to move beyond the hawk-dove dynamic and foster psychological safety. The concept of psychological safety—pioneered by Harvard’s Amy Edmondson—emphasizes an environment where individuals feel safe to take risks, admit mistakes, and voice their opinions without fear of ridicule. For founders, this safety is crucial to shift from a proving mindset to a learning mindset.
Here’s how VCs can help founders cultivate a growth mindset and unlock their full potential:
1. Embrace Collaborative Feedback
VCs can be intentional about framing feedback as collaboration rather than criticism. When founders feel that their investors are partners in the journey, they’re more likely to open up to constructive input.
2. Model Vulnerability and Openness
VCs can share their own mistakes and lessons learned, normalizing failure and reinforcing that growth comes from iteration. This vulnerability can encourage founders to do the same.
3. Reframe Success Beyond Financial Metrics
Investors can broaden the conversation to include personal development, leadership growth, and long-term value creation. Founders need to know they are more than the numbers they report.
4. Provide Space for Experimentation
VCs can create a buffer for founders to experiment without fear of immediate judgment. Allowing room for trial and error can foster creativity and prevent founders from getting stuck in rigid thinking.
5. Set a Tone of Psychological Safety Early
Founders are more likely to adopt a growth mindset when psychological safety is present from the beginning. Investors can set the tone by asking questions like:
- “What are the biggest unknowns you’re working through?”
- “What’s one mistake you’ve learned from recently?”
Why Psychological Safety Matters, Even When It Doesn’t Align with Financial Outcomes
Some might argue that prioritizing psychological safety over purely financial outcomes can detract from a VC’s fiduciary duty to their limited partners. However, the truth is that sustainable success requires more than numbers. Founders who operate with a growth mindset are better equipped to adapt to market changes, pivot when necessary, and build resilient companies. In fact, growth mindsets are a strategic advantage, especially in a volatile environment where the ability to learn and iterate quickly can make or break a startup.
There may be moments when supporting a founder’s development doesn’t align perfectly with maximizing short-term financial outcomes—for example, allowing time for leadership coaching or mental health recovery instead of driving immediate growth. However, the long-term payoff often far outweighs the short-term sacrifice. Companies led by founders with growth mindsets tend to be more innovative, adaptive, and enduring, ultimately delivering better returns for all stakeholders involved.
Conclusion: Moving Beyond the Fixed Mindset Trap
Founders and VCs each have unique pressures, but those pressures don’t have to turn into obstacles. The real opportunity lies in embracing the dynamic interplay between the two—building relationships where both sides feel safe to engage openly, challenge assumptions, and grow together.
When VCs create psychological safety and encourage a growth mindset, they help founders become better leaders, innovators, and decision-makers. Moving beyond the fixed mindset not only strengthens founder-VC partnerships but also lays the foundation for building companies that endure. It’s a reminder that while the road to success is never linear, the path becomes smoother when founders and investors lean into collaboration over competition, learning over proving, and growth over fear.
By intentionally shifting these dynamics, both founders and VCs can unlock more than financial value—they can build the kind of trust, resilience, and creativity needed to thrive in the long run.
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