What are they really saying? Often you have to be able to read between
the lines to get the real meaning.
As an entrepreneur in the middle of raising capital for your project, you must have been in the situation at least once. You are always well received, they are smiling, you get speaking time and then get a polite, well-founded rejection. Their formulation is nice maybe with an opening for another aproach later …but you get the feeling that they mean something else.
Here is the reality is behind some of the most common answers:
It is too soon. We would like to look at the project again, when you have come a bit further and have proven some moreAs investors we do not really believe in the business. Forget about it.
There are many good features in the project. But you lack some important expertiseYou are not the right team to follow this through
Is it patentable?With no robust patents the concept is too easy for others to copy
We acknowledge your fresh idea to become first movers, but…You just don’t know the other 250 persons with the same plan as you
You may want to do too many things at once and should maybe focus moreIt is a tough industry. You will end up being run over
Don’t waste time on non-believers
Either the investor gets your message or not. Do not waste your time on convincing potential investors – in other words do not over sell, let them buy your message. There is always other potential investors so move on to the next one in line. Your time is too presious for doubters
- Make your very short pitch with all essencial investor questions answered. An appetizer document you can e-mail them to get an introduction meeting.
- Follow up by phone, if you do not get an instant reply. Focus on a short one hour introduction metting
- Prepare a 15 minute presentation of your investment project – that leaves enough time for questions
- Give them the business plan – not when they ask for it, but when they show interest for your project.
- Use you second meeting to go in depth with your plans – match them with their expectations.
- If rejected make a note of the justification for your evaluation. Get at least three rejections before you adjust your material.
Be aware that too much information at the same time can immediately kill your initiative, no matter how important you think the information is for their decision.
If you want inspiration for your approach visit Mark Suster’s blog Both Sides of the Table. He is the entrepreneur that turned to venture capitalist and Mark is sharing views from both sides of the tabel. Read more about getting investor ready.