Truth: Fundraising is draining and sometimes terrible. Myth: Fundraising has to be soul-sucking.
Fundraising can be a wild and unpleasant ride. It can feel like cold calling, but really visually - in person or on Zoom. And instead of selling someone else’s hotcakes, you are selling hotcakes you brought to life yourself, made of your own blood, sweat, and maybe even some tears. So it's only natural to take a “no” or a “not now but come back in six months” as a gut punch or personal affront. The worst scenario is having promising first and second calls with a potential investor, only to be met with silence—the proverbial VC “ghosting.” At FirstMile, we take passing seriously and strive to handle it promptly and constructively. However, rejection undeniably stings.
For many investors, saying no is one of the least pleasant parts of the job but ultimately has to be a core competency for any serious investor. The “pass” emails, calls, and convos are not easy. But we’d be real a-holes to tell you sending a pass is as hard as being on the receiving end of the no.
The sting of investor rejection is rarely soothed by telling yourself about the odds of VCs actually investing in your company e.g. most firms pass on 99% of the founders they meet. As a founder, you likely know this already, but “stats” in startup land, especially survival rate, generally are not in your favor and will not give you reassurance. Hence, you have to ignore them if you want to persist. We give major props to all founders fundraising AND riding the daily startup rollercoaster of progress and setback. You have to be a special breed of masochist. You have the hard job of taking the hit and getting back up. We all know the apt Rocky film quote to interject here.
So how can you handle potentially continuous rejection while you still have to get up the next day to run your business with confidence, deliver your next pitch with energy, and not take any of it personally? Do not personalize the rejection. A VC is essentially passing on your business (not you) at that point in time. But don’t VCs sometimes pass on the basis of the founders themselves? Yes, they could be passing because they do not believe you are the right leader or have the skill set required to grow a billion-dollar business. But to be clear, they are not passing on you on a personal level. By depersonalizing rejection, you empower yourself to process feedback honestly and potentially re-engage with VCs in the future.
Founders who have resilience in mind and emotion do not get sucked into the mental Jumanji game that fundraising can feel like. Of course, this is all easier said than done, especially coming from our side of the table. But if you can do it, i.e., take out the personal reaction to a rejection, you empower yourself to do so much more. First, if a VC gives you feedback, you can process it more honestly and see if it's something you agree (or not) or something you can change or revise. Second, you leave the door open to potentially re-engage that VC.
We comprehend how businesses evolve; i.e., the company you presented six months ago is likely not the same today. Your world can evolve very fast. Several companies in our portfolio were initially a “pass” for us but stayed on our radar, leading to eventual investments. Rejection is not always the end of a relationship; it can mark the beginning of a different chapter. We don’t always get “no’s” right, but we definitely don’t always see “no’s” as the end of the relationship.
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