Investor’s Behaviour – if startup team loses motivation and progress stalls

When a startup team loses motivation and progress stalls, an investor can play a crucial role in reigniting energy and guiding the business back on track. Here’s what you can do to address stagnation and boost morale:

1. Diagnose the Problem

Before acting, understand why motivation is low. Common reasons include unclear direction, slow revenue growth, internal conflicts, or burnout. Conduct open discussions with founders and key employees to identify the root causes.

2. Reset Goals and Vision

If the team feels lost or uninspired, help them refocus on the company’s mission. Encourage leadership to articulate a compelling vision and set achievable short-term milestones. Tangible progress can re-energize the team.

3. Offer Strategic Support

• Provide Industry Insights – Share market trends, customer feedback, or competitor movements that may inspire new strategies.

• Connect with Experts – Introducing mentors or advisors can bring fresh perspectives and solutions.

• Reassess Business Model – If the startup seems stuck, reconsider revenue streams, partnerships, or expansion strategies.

4. Boost Morale and Team Engagement

• Recognize Achievements – Even small wins should be celebrated to create a positive atmosphere.

• Encourage Team Bonding – Organizing informal gatherings or team-building activities can rekindle enthusiasm.

• Support Mental Well-being – Address burnout by promoting healthy work-life balance or suggesting professional coaching.

5. Evaluate Leadership Approach

Sometimes, the issue lies in management. If founders seem overwhelmed or ineffective, help them refine their leadership style, introduce operational efficiency tools, or explore additional executive hires to share responsibilities.

6. Financial Incentives and Adjustments

• Revisiting Compensation Models – If underfunding is affecting morale, consider performance-based rewards.

• Additional Investment or Pivot Support – If the startup needs a financial boost or strategic redirection, discuss practical funding options.

7. Decision Time: Continue or Withdraw?

If, despite interventions, the startup shows no signs of revival, reassess your investment. Decide whether to remain involved with adjusted expectations or exit strategically to minimize losses. The key is to be a supportive yet pragmatic investor—balancing patience with action.

Read more:

  • Cumming, D., & Hornuf, L. (2018). The Economics of Crowdfunding Startups, Portals and Investor Behavior. Cham: Springer International Publishing :.
  • Grebey, J. F. (2011). Operations due diligence: an M&A guide for investors and business (1st edition ed.). New York, New York State: McGraw-Hill Education.
  • Greene, J. R., Krouskos, S., Hood, J. A., Basnayake, H., & Casey, W. M. (2018). The stress test every business needs : a capital agenda for confidently facing digital disruption, difficult investors, recessions and geopolitical threats (First edition. ed.). Hoboken, New Jersey: Wiley.
  • Greiner, S. P. (2013). Investment Risk and Uncertainty: Advanced Risk Awareness Techniques for the Intelligent Investor: Wiley.
  • Martin, R., Casson, P. D., & Nisar, T. M. (2007). Investor Engagement: Investors and Management Practice under Shareholder Value (1 ed.). Oxford: Oxford University Press.
  • Schmidlin, N. (2014). Art of Company Valuation and Financial Statement Analysis: A Value Investor’s Guide with Real-Life Case Studies. Somerset, NJ, USA: Wiley.
  • Singh Bachher, J., Dixon, A. D., & Monk, A. H. B. (2016). The New Frontier Investors : How Pension Funds, Sovereign Funds, and Endowments are Changing the Business of Investment Management and Long-Term Investing (1st 2016. ed.). London: Palgrave Macmillan UK.

Written by Swedish Ventures, Rolf Olsson. Remarks to this article could be sent to glossary@swedishventures.se.

ASO: DD-13-19