Forward Thinking Media - When a VC Passes, Don't Ask Why
I remember when I was first starting off in startups, whenever I pitched a VC who eventually passed, I always asked them to tell me the reason so I could improve and do better. Every time, their answers were all a variation of:
For a while, I made fun of VCs for not being smart enough to realize how good of the opportunity my startup was. Or for passing for the wrong reasons. Only years into my startup career do I realize that 90% of the time, the reason a VC tells me they passed on my company is not the actual objective reason. Why? Because the actual reason is that they don’t believe I can get the job done. They don’t think I have “the stuff.”. But this really is rude to share with a founder, so many VCs have come up with tons of boilerplate feedback to share with founders who want a reason for the pass. Due to this, I now have developed the opinion that if a VC passes, that’s all the feedback I need to know. Anything else a VC shares on why they passed will only hurt me. Startups are one of the riskiest asset classes out there. Ask any VC who backed Google, Uber, Facebook, etc. out of the gate, and they probably had a scenario in their head where those investments could have not worked out. And I bet they have had plenty of surefire wins that backfired and went to zero. There is an infinite amount of reasons that a startup could fail and it’s very easy for a VC who doesn’t believe in a founder to list them out after a pass. But why should a founder take any feedback from someone who doesn’t believe they have the ability to execute their vision and build a big company? Especially in an industry where the outliers are the real winners. Outliers Run The WorldIf a founder listened to the advice of non-beilevers, the chances of reverting to be a more average company go up, which makes their outlier potential to go down. The things that make the outliers huge companies are the fact that they do things their way. They think differently. They are mavericks. They don’t seek out average advice from non-believers. They try to find the believers and listen to them. That thing that makes you different is not a flaw, it's is a feature. And you may need to go through 10-15 VC conversations to recognize it but I promise you that adapting your startup to fit advice that a non-believer gives you will set you up to attract more non-beilevers. Instead, let your freak flag fly, be weird and strange, and do things your way. The right investors will spot you and will help turn you into an odd ball pre-seed startup into an outlier IPO success. The other option is listening to non-believers, even getting funded by them, and having the worst 10 years of your life (and not even getting rich at the end of it). Your choice! If you liked this post from Eureka Blast, why not share it? |
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