May 29, 2013

Rejection

A friend of mine let me know that one of the VC firms they've been meeting with decided to pass yesterday.

That's always tough to hear; along with the pass comes the self doubt, the temporary buzz in the brain that says "you're not good enough", "they don't get it", and "how am I going to explain this".

You place your hopes with someone, and they let you down--that's what it feels like. The potential date that says no, no thank you. You get that sinking feeling.

But the problem is you've allowed your hopes to become expectations, and have attached that to a single person, firm, date, or kickball teammate.

Rejection sucks.

But it sucks worse when you drink your own Kool Aid and expect that to be enough. The letdown is big.

Now what?
  • Raising capital is a sales process. Treat it that way. 
  • You want true believers as investors. If they passed, they weren't true believers (yet) and you didn't want them anyway. 
  • Yes, question yourself. Is your model right? Solid? Believable? Does the tech work? 
  • Why should a customer care? 
  • Why should an investor care? Investors are motivated by outcome first, other stuff next. 
    • What's the outcome for them at a $10 million exit? $30 million? $200 million? 
    • How do you get there?
  • Map out your professional and social networks on a whiteboard. Or paper. Or whatever tool works for you (I find this exercise easier on a whiteboard initially). Then research who might be connected to potential investors. Go to AngelList.com, research there. Research, research, research. 
  • Expand your pool of potential investors to 100. You only need 1. Build that damn list and start working it. 
  • Don't forget the customers. The more customers that validate your model, the more you've mitigated risk for investors, and the more attractive you become to them.
Finally, don't give up. It's just one investor, and they did you a favor. What did you learn from that? Are they willing to give an exit interview? 

You'll get there. You just have to keep working at it. In the meantime, don't beat yourselves up. 

You'll get there.