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How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
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Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
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When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
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The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
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We Can't Grow by Saying "No"
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Wait a Minute before Giving Away Equity
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SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
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Why Having Zero Experience is a Huge Asset
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$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
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How Startups Actually Get Bought
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Startup Financial Assumptions
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If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
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Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
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Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?

Hey Investors — Here's how to say "No" to us

Wil Schroter

Hey Investors — Here's how to say "No" to us

Investors — As Founders we love you, need you and appreciate you. But the relationship feels very one-sided when we're pitching for capital. As Founders, we just need a better way to communicate not only the evil word "NO", but the equally evil word "Maybe." "Yes!" we seem to have figured out.

All we're asking for here is to be treated with respect and dignity. We don't need to be coddled, we just need a clear "No" when the time is right and ideally some basic kindness along the way. It doesn't take much, but we could really use some shifts in how we communicate these days.

Don't be a Dick

I've met with and pitched hundreds of investors. If there's one thing that I could never figure out, it's why so many act like raging dicks. Not all of them — some of them are incredibly kind, and I'd kill to do business with them. But it's an obvious minority. (Point of Fact — Plenty of people think I'm a raging dick too, so I'm very aware of the behavior).

Investors — Founders like us are your customers. If you don't like a deal, you can pass - no worries. What isn't required is for you to rip the Founder apart and make them feel awful for no good reason. Let's say that you found another company that is doing the exact same thing that they were unaware of. Do you ram it down their throat or politely say "It's probably worth investigating" (a cool way of saying "You should have known that")?
There's zero mileage in being a dick. Best case, no one will want to work with you — worst case, Founders will go out of their way to tell other potential customers not to work with you. Either way, you lose.

Don't Pretend to Know the Outcome

You've spent 60 minutes thinking about this problem — the Founder has spent (in some cases) their entire career on this problem. Don't pretend that your ability to write a check grants you the ability to predict the future. It's totally fair to say "I could foresee some challenges in these areas", not "Google is going to totally eat your lunch." You don't know that, you think that, so the response should be framed as such.

The problem with overstating your lack of certainty combined with lack of actual market knowledge is that inexperienced Founders often believe you do know how to predict the future. It's not a hard fix, either — just find/replace "will" with "might." Easy peasy.

Don't say "Maybe"

As an investor, you know exactly what "maybe" means. It means "Who knows? Maybe this thing turns into something later and I don't want to miss out if it does!" And that's a totally fair sentiment for you. You see tons of deals, so saying "maybe" doesn't hurt you at all.

But it crushes Founders, because "maybe" sounds like "yes" is around the corner. We don't see "tons of deals" — only ours. So when you say "If you could just hit $1 million in sales we could talk" that leads lots of Founders to think "Oh, so long as we hit $1 million they will invest!"

A better response is "No, not now. We'd be open to talking in the future and we'd like to stay in touch, but we aren't going to do anything now." We need a hard "no," even if it's followed up by keeping the door open. That's fair, but it lets us move on.

Any ONE of these things would be a massive improvement in our communication. If you're already doing all of them — you rock — and thank you! We love you, we just need some love back.

In Case You Missed It

How to Find Angel Investors. One of the hardest things to do is get your foot in the door — anywhere. And that applies to finding angel investors as well. How do you find angel investors? How do you get angel investors to invest in your startup? We’ve got you covered.

How Do I Pitch Friends & Family? How do we ask friends and family for money without it getting totally weird? Is there a way to "pitch" that doesn't leave both sides feeling uncomfortable every Thanksgiving?

Should I Regret Not Raising Capital? (podcast). Have you ever asked yourself, "Do I need to raise capital to be successful?" Wil and Ryan break down why you probably don't need to regret NOT raising capital. At least not yet.

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Mouli Vissa

Really an excellent article. So TRUE..
But kindness, humility and compassion are not virtues which are available these days, more so with people who have a cheque book in their hands.
Something in me says, this article has been read by those pitching for monies, not those giving them (!)..Hope I am wrong.
Rgds
Mouli
Founder Director
UniTol Training Solutions
www.UniTol.in

Reply4 years ago

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