Why Investors Actually Say No
Understanding the difference between the 'polite reason' and the 'real reason' for rejection.
7 min read
"You're a bit too early for us" is the "It's not you, it's me" of venture capital. It's rarely the complete truth.
The Translation Guide
- →Polite: "We need to see more traction."
Real: "Your growth is linear, and I don't see how it becomes exponential." - →Polite: "We have a conflict in our portfolio."
Real: "Your competitor is actually better, and I'm betting on them." - →Polite: "I'm not sure about the market size."
Real: "I think your TAM is a hallucination and you haven't validated it."
Insights
Investors rejection often stems from a lack of "Conviction." Conviction isn't built on spreadsheets; it's built on a founder's ability to demonstrate a unique insight into a hard problem.
How to Get the Real Story
If you have a good relationship with the associate, ask them off the record: "What was the main reason the partners said no?" or "What would you change about the deck before I pitch to [Competitor Fund]?"
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