I learnt this lesson after getting kicked out of my company by VCs from NY (the story is not dramatically different than what Fred did at Twitter). My VCs always pretended to be incredibly supportive, but when we found ourselves in a tough spot, I saw the really ugly side of the VCs (making baseless threats to get the founders off the board, telling porkies to other investors to sullying the founders repuation, etc etc). In my experience, the east coast VCs are the worst - they play a lot more games / most of these guys are banker types. Most of them have never built a company before and have no clue what it takes to really build a successful startup (sorry, just because you sit on a board doesn't mean you understand the hard work, tears, daily ups and downs, personal sacrifice it takes to build a business).... These people know how to schmooze, and then stab you in the back if they don't get what they want....
Investors have 1 goal - maximize their ROI. They are your friend as long as they think they are getting the maximum return they can get. If you are an entrepreneur and you believe anything else, you are waiting to be screwed. As an entrepreneur, it's your job to protect yourself.
If you are an entrepreneur reading this, take the following advice from someone who got f by people like Fred.
1. Read Brad Feld's book "Venture Deals" before you take money from any investors. Make sure you know every single terminology in the term sheet (this is where the wolf in the sheep's clothing reference is really true - VCs will screw you over if you don't understand the term sheet).
2. Hire an exec coach or a successful entrepreneur who has seen the ups & downs on your advisory board - someone you trust completely (Never trust your board member to be this person - no matter what anyone says). The advisor and the exec coach are your 1st phone calls - they are fully aligned with, unlike VCs. IA good exec coach can really help if you are dealing with tough board situations. f you are part of YC, you always have that support.
3. If you are a valley based company, avoid all east coast VCs if you can. They are all made from the same dirty cloth.
4. Maintain board control as long as you can.
5. Try to negotiate and get a final say on the independent board seat (often hard to get).
6. Learn how to manage your board - this is probably the most important advice. You need to know how to play the game, so that in tough times you have enough support to keep your job. If you don't have a board control, then try to build allies - perhaps build a strong relationship with 1-2 board members that will support you when others are trying to screw (which they will!).
At the end of the day, it's all about leverage - as soon as you are about to get your first board member, think how you build leverage. There is nothing wrong in taking money from VCs, you need them, and they need you. But if you get into the relationship knowing this is not about friendship/relationship - it's just business, and when it comes to money, people act in all kinds of ways, you will not be under delusion. You will protect yourself from day one. Good luck!