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As is often the case with the more notable partnerships in history – think Allen and Keaton, Taylor and Burton, or alas, Tom and Jerry – sometimes the one you need the most is also the one who drives you the craziest. The same can be true in the high-stakes world of startups, where the art of balancing the differing priorities of impassioned entrepreneurs with their lifeblood-breathing investors can be a tough one to master.

At the beginning of any early stage company, entrepreneurs must struggle to prove its value. The pressure to develop and perfect products, search for viable revenue models and attract enough customers to validate the effort can be relentless. These endeavors are also ultimately what will define the legacy of the business and, whether or not they're aware of it, it's this legacy which is often an entrepreneur's primary motivator.

As an investor, however, issues of legacy aren't a primary consideration. In basic terms, recurrent investors have an interest in seeing the dollars they spend come back to them. This limits the concern they might have in seeing the company they've backed become, for example, highly regarded in their chosen industry or community. In other words, what matters to the investor are the landmarks which increase the company's worth.

It's fundamental differences like these which often lead the entrepreneur and investor to pull in different directions and ultimately create deep fissures in the partnership.

Timing is everything

For an investor, it's a delicate balancing act to keep entrepreneurs grounded in reality, yet still pursuing lofty goals. Entrepreneurs are defined by their passion and the tenacity with which they pursue their goals and thus, they're commonly in it for the 'long haul.' There will be some who will focus on exiting their venture fast and efficiently in order to forge on to the next but, for most, their focus is on seeing their vision through to the end.

The majority of investors will have a different view. Like most in the field, I used to look at 10 years as the absolute outside window of my investment term. With the pace of technological innovation as it is, investments made today will reasonably have a five year grace period before investors start pushing for an exit. My five-year window and an entrepreneur's 'long haul' typically don't match up.

Entrepreneurs are aspirational; they develop products, ideas, and companies to leave their lasting mark in the world. This doggedness is necessary – some would say essential – for a company to succeed. It's what keeps the lights on beyond all reasonable hours, and enables greatness to be pulled from what might have otherwise been burning failure. Smart investors will look for exactly these qualities in a startup. The smartest investors then make a point of letting entrepreneurs know their ultimate goal: to be in and out of the investment as quickly, efficiently and profitably as possible.

Set expectations

To avoid the types of conflicts which can arise between investors and entrepreneurs in a startup environment, it's important to clarify expectations of a partnership before choosing to work together.

Entrepreneurs inevitably want their company to last,while investors want it to be successful and to get their money out. As time goes by and a company matures, investors begin looking for where this exit can be made – and often this means a public exit or an acquisition. If mutual expectations haven't been discussed early on, no matter what form an exit comes, it's likely to be jarring.

For entrepreneurs, taking money from investors often comes with strings attached in one way or another. Without proactive, detailed and transparent discussions of possible future pitfalls, eventualities and personal expectations, relationships are going to get damaged and, as a result, it's likely that the business will too.

Reality Check

  • When partnering with an investor, have a conversation immediately about what their typical investment holding period is. An investor pushing for an exit after one year is as unreasonable as an entrepreneur expecting a partnership for ten.
  • Establish lines of communication for both active and passive investors. The same style of conversation won’t work for both.
  • Go into your investment meetings with an exit plan. It doesn’t need to be fully developed, but showing thought goes a long way to easing investor tension.
  • Know the strings attached to each investor. If you’re lucky, everyone has the same strings attached to their money; chances are you won’t be lucky. Knowing upfront what confrontations or challenges you may have down the road can save a lot of time and energy if and when they arise.

Cameron Chell is the co-founder and CEO of Podium Ventures , a venture creation firm in Calgary that finances and builds high-tech startups .