Yet, it doesn't have to be this way; pitching can be respectful and mutually useful, even if it's a no.
Here's a Simple Guide to Being an Empathetic VC:
In one of the first meetings for our seed round, a highly-respected seed VC (who passed on us and probably doesn't even remember this) asked what our go-to-market plan was.
We thought for a minute and said "well, I guess build it and sell it?”
Though he doesn't know it, that small kernel of advice took root.
The very next week, with this newer thinking, "no" meetings started to turn to "yes" and were able to start growing the company.
Use your expertise to help and guide founders, even if it won't directly benefit you in the moment.
If it's a "no" just say it.
Especially in early rounds, if a VC likes a deal you'll know quickly.
Like within hours, maybe even in the meeting itself. @roybahat offered to write us a check on the spot (hold him to this, future founders!)
We're still waiting excitedly to hear the results of several pitch meetings we did with VCs when raising our Series A in 2015. (We didn't pitch these firms again.)
It's better to be direct and help them understand why you passed (which can be helpful) than a dismissive “let’s keep super close on this.”
If the VC doesn't get you, then they don't. If there's something to learn from it, hear it. If there's not, then move on.
Pay it forward; give generously of your experience and expertise to the founders spending time with you. Seek out founders who otherwise wouldn't have access to you and help them.
Even a little direct guidance can mean the world.
Find these founders, help them, advise them, even if it's not the right thing for you fund them. (And then fund some of them, especially ones who wouldn't have had access to you otherwise!)
I totally understand, from the VC point-of-view, exploding term sheets make sense. No one wants their deal shopped, the term sheet shown to another potential investor to get matching (or better) terms. Founders that do that suck.
Term sheets that explode in 48 hours don't allow founders to make a good decision, and they often make a choice everyone later regrets.
That's not to say that you shouldn't compete for great terms, but in the end adding quality human beings to your company is incredibly important and will outpace an extra $5M of valuation.
If you have to 🔥 the term sheet, 2 weeks is empathetic. 1 week is semi-reasonable. Less than that is 😢.
I remember how much it meant to us when @aileenlee called to tell us that she wanted to lead our seed round and said (about the financial terms) "this is the awkward part, sorry, even I get nervous talking about this stuff.”
In the end, this interaction was one of the reasons we chose to work with Aileen (and still have her on our board); she is authentic and real and human. She sees us as more than just fast revenue growth.
Be open and honest, share with founders how your process works (and what's good and bad about it), what you're thinking, what you're worried about in the deal.
This builds irreplaceable trust.
But even these few simple things can create a radically more empathetic environment for founders. Be human, kind, helpful, and generous.