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1/ Say “no” with humility and empathy. It’s the hardest thing somebody raising capital with existential fears ever has to hear
2/ On saying “no” as a VC with grace. Step 1 – do it by phone. If somebody took the time to meet with you and if they’ve asked for feedback you owe it to them to give them verbal feedback.
3/ It’s really frustrating, energy-sucking, nerve-wracking, depressing, anxiety-ridden and self-confidence-testing to ask for money. Failure not only means bankruptcy but also a sense of letting down employees, investors, customers, suppliers, family -EVERYBODY. Show some grace
4/ You can say no via email if you never agreed to a meeting. It isn’t your responsibility to hop on the phone with every company who asks for your time but if you grant it and if you took a meeting the recipient deserves a verbal “no”
5/ I met with @JamesCurrier right before I became a VC. I asked what he thought about the job. He said “I’m an entrepreneur, I always see what is possible. The depressing thing about being a VC is having to tell people ‘no’ all the time.” (paraphrasing). This always stuck with me
6/ Saying “no” is the worst part of being a VC and for those who take board seats and are active & do 2 deals / year - by definition it is our jobs to say “no” constantly. It is draining. But it isn’t half as draining as hearing “no”... So man and woman up and pick up the phone!
7/ I had to fund raise for 9 years as founder & CEO. I did this during the dot com bust. I can’t tell you how many “no’s” I got. The secret about building a VC firm is that it requires an equal amount of “no’s” from LPs. You get all “no’s” until you make it & are over-subscribed
8/ I think every VC should have to pitch new LPs so they can remind themselves of the humility of having to ask for money and being told “no” when your pride is on the line. Everybody knows you're raising. You don't want to come home empty handed
9/ I can’t say that I contact everybody who pitches me to proactively tell them “no” – some never follow up. In all honesty, follow-up from a pitch is an easy test of follow through. I aspire to give feedback to anybody who asks.
10/ I try to give a sense of where I stand during 1st meeting. It falls into buckets such as, “I could see funding this in future” to “I don’t think this is likely a fit for me” to “I’m excited to dig in & learn more now” I think it’s important to let people know where they stand
11/ I think many VCs don’t want to say “no” because they believe that you won’t come back in the next round if they tell you “no.” I think a polite “not now” is much kinder than faking a “maybe.”
12/ I’m sure I’m not always perfect in how I communicate with founders. When it comes to fund raising I strive for empathy always. I try to be helpful with ideas of what I would do in their situation. I try to avoid saying “We’re going to pass” – I always found that so unpleasant
13/ Somehow the friendliest, most honest and human “no’s” I ever got engendered my deepest respect and admiration. I think about @gustai when I was an entrepreneur or Jessica Reed Saouaf when I first was a VC
14/ I'm not sub-tweeting anybody. This is general advice I give to new VCs constantly. Just easier to put here than blogging :)
15/ SUMMARY: Say “no” with humility and empathy. It’s the hardest thing somebody raising capital with existential fears ever has to hear. <end>
