Comments on: Why Don’t Venture Capitalists Tell You Why They Won’t Invest?

By: Mike O'Horo

Mike O'Horo — Fri, 22 Jul 2011 23:35:00 +0000

Phil, unfortunately, that’s a really old-school sales philosophy you were exposed to. It’s based on so much “acting upon” language, e.g., “qualifying,” “closing,” “overcoming objections (by),” etc. A much more sustainable, welcomed and cooperative model is investigative. If we begin by recognizing that the two poles on the outcome spectrum are “it’s a great idea to do business together” and “it’s a terrible idea to do business together,” then we can conduct a high-integrity, mutual investigation to determine where this relationship/concept combo falls on that spectrum. The key is “mutual.” If such an investigation reveals that we’re closer to the “great idea…” end, we’ll both want to get it done. No need for “closing.” If we’re closer to the “terrible idea…” end, no point to closing. I’d hope that neither of us would still attempt to ask the other to do it, anyway.

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By: lemerian

lemerian — Tue, 04 May 2010 01:01:41 +0000

By: Ms. Freeman

Ms. Freeman — Thu, 19 Nov 2009 16:41:23 +0000

Given the information outlined on your "What we invest in page" it is pretty clear, so I would imagine you wouldn't get too many pitches that don't fit within your theme.

A quick 'No' is generally better, kind of like quickly yanking the bandage off and it allows the individual to move on to the next person to offer the opportunity to.

By: Phil Sugar

Phil Sugar — Tue, 17 Nov 2009 21:16:37 +0000

I followed this thread with interest because I do try to give back and help out other entrepreneurs since I've done many raises.

Really reflecting, I guess by the time you get to the pitch phase you are right. All the easy reasons for a no would mean you wouldn't get the opportunity to pitch in person.

So its almost hardest to give good rational for the people that have invested the most time, because I have to agree with you and Jason you really can't tell a person "I don't like you"

By: Healy Jones

Healy Jones — Tue, 17 Nov 2009 16:22:35 +0000

From my time as a VC, I think the biggest reason most startups don't get funding is because the VC doesn't love the team. This is a pretty tough message to deliver, and I think many VCs dodge around it by either not saying no or asking various questions about what the "team looks like going forward." I've blogged a bit on how a startup founder can unearth that the team is the issue earlier this year: http://www.startable.com/2009/05/27/its-not-me-it...

By: Jason Mendelson

Jason Mendelson — Tue, 17 Nov 2009 15:06:06 +0000

I think the answer is yes.

By: Phil Sugar

Phil Sugar — Tue, 17 Nov 2009 14:52:17 +0000

I agree that its sometimes hard to give a reason because people view that as an opening….i.e. they are so happy you didn't just not reply.

I've really been studying sales (I think its the most important aspect of business that business schools completely ignore). The two most annoying "techniques" that are taught are: "overcoming objections" and asking a hypothetical question that must be answered in the affirmative to get the other party to start saying yes (there is an example two posts down).

I have begun to get nasty to both techniques.

On the first I tell people I have been polite enough to tell you why its a no, if you would like to see me get impolite we can continue.

When somebody asks me a question like "If I could triple your sales would you be interested?" my standard reply is: "if I smashed you in the head with a baseball bat would it hurt?"

By: Jason Mendelson

Jason Mendelson — Tue, 17 Nov 2009 14:31:07 +0000

Doesn't sound like the right profile. We invest larger dollar amounts.

----------------------
Jason Mendelson

Sent from my iPhone
- please forgive iTypos.

By: Tim McKee

Tim McKee — Tue, 17 Nov 2009 14:18:07 +0000

Tough to say "No" to a well thought out investment plan returning 500% by FY 3 and only $50K buy-in. Interested in learning more?
Apologies for borrowing your blog.
Tim McKee
atmckee@aol.com