I’ve got a lot of experience with investor rejection emails since we had 63 investors pass on investing when we raised our Series A funding and a whole bunch more when we raised our Series B funding.
Many investors just never responded after they lost interest in our company. However, many others did respond.
One time I got a rejection driving home from meeting with an investor. I had to laugh.
Sometimes, you get very heartfelt rejections where it is clear that the partner wanted to go through with the deal, but other partners were blocking him.
For example, here’s one from when we were raising our Series B funding:
I talked about Touchstone on Monday and did some more work this week and its just a huge mountain for us to climb to get it done. I believe in you and the team and its really impressive what you have been able to achieve – but our issue is with limited capital to deploy there is a ton of pressure on us (and me) in terms of what opportunities to pursue. While I believe you all are going to make money for your investors (and the team) its just hard to stack it against everything else we are looking at right now. I am more than happy to talk with you more about it live. Tomorrow is going to be difficult but could connect up on Monday or Tuesday if you think its worth talking about where we came out where we did. Its not very comforting – but it had relatively little to do with Touchstone.
That’s about as nice a no as you’re going to get. Now, make no mistake, he's telling me there's no chance they were going to invest in our company. However, the sad thing is the heartfelt rejections are usually from people you’d really like to work with.
The reality is you’re not going to change an investor’s mind, but…
There’s always another round of funding. In other words, an investor telling you no is just no for now. Their view might change, especially as your company progresses.
So what do you do? Just say thank you.
Here’s what I wrote back to the investor:
Thank you for letting me know. I must admit, I am disappointed because you are one of the "good guys" in the VC world. Having said that, I am also not surprised.
I appreciate the offer to talk, How about Monday at 3PM?
Best of luck to you,
That’s it. Just a simple thank you. And then what should you do next?
Keep moving on to the next investor.
I’m not going to lie to you, getting rejected hurts. But you need to pick yourself up and dust yourself off and just keep moving.
In the above case, there was an offer to get some feedback, so you should absolutely say yes to an offer like this. Just to be clear your goal is not to change the investors mind. Instead, your goal is to see if you can learn something valuable, so you are better prepared for your next investor meeting.
And, you should ask if the investor knows anyone else that might be interested in investing in your company. This is networking 101, and this is how I found my first investor.
For more on being rejected by investors, read: