Llew Claasen, co-founder of Cape Town venture capital firm Newtown Partners alongside Vinny Lingham, has backed South African startups including SweepSouth. His view: most startups that fail their investor relationship do so from under-communicating, not from a bad initial match.
Communicate more than feels necessary
Claasen’s core advice is blunt: never worry you are contacting investors too often. Regular updates, even about problems, build the trust that makes an investor actually useful when things get hard.
Don’t expect an investor to run your business development
A common founder misconception is that investors will actively hunt down customers or partners on a startup’s behalf. In reality, founders need to pull value out of the relationship deliberately, by identifying specific introductions they want rather than expecting them to be offered.
What makes an investor relationship toxic, and what to do about it
Claasen says toxic investor relationships do happen, usually because the founder hasn’t managed expectations, missed targets without communicating why, or spent irresponsibly. Where there’s no clean way to exit the relationship, setting shared goals and a structured engagement framework is the practical fix.
Frequently asked questions
How often should a founder communicate with investors?
More frequently than feels necessary. Regular, open communication, including about problems, is what builds a workable long-term relationship.
Will my investor help find me customers?
Not actively. Founders need to identify specific introductions they want and request them directly, rather than expecting investors to generate leads unprompted.
Can an investor relationship become toxic?
Yes, usually from poor communication or missed expectations on the founder’s side, and it needs a structured framework to manage if an exit isn’t possible.
What should founders set up with investors early on?
A regular reporting rhythm, such as a KPI update at least monthly for active investors, to keep expectations aligned.
Who is Newtown Partners?
An early-stage venture capital firm founded by Vinny Lingham and Llew Claasen, operating out of Cape Town and the US.
Further reading: Knife Capital’s venture capital approach
Originally published in 2016. Updated September 2026.
