In any dynamic industry with smart and ambitious people, chances are there will be a ton of “no’s” thrown around. Take politics, for instance, as unappealing as it is. Or, anything, for that matter. In the startup world and, specifically in Silicon Valley, any member of the ecosystem may here 99 “no’s” for every single “yes” they receive. Sometimes the ratio is even more severe. This is all part of the implicit contract of being here: nothing is promised and nothing is guaranteed. In this post, I will talk about delivering a “no” and receiving a “no,” hoping that it will help both founders and investors to think through the right approach that suits them best.
Delivering A “No”
Every single member of the ecosystem has to deliver a “no,” and sometimes they comprise 99.99% of the responses. Folks who want to work at startups have their application rejected. Developers at startups who want to take the product in a new direction may hear “no” from a colleague with more authority. Founders reaching out to potential partners will certainly hear a “no” quite often. Companies asking for media coverage will hear a “no,” and so on and on. It’s a cycle, one that can’t really be taken personally, because you only get what you ask for, right?
In the Valley, the “no” that perhaps stings most comes from an investor evaluating a potential investment. Venture capitalists, in today’s age, are lauded as celebrities on Twitter and have their own cult followings, myths, and relationships. It’s not sexy to discuss, but I’m always surprised how many really smart founders and future founders seem to forget that VCs are, at the same time, money managers, expected to manage funds and return cash on cash after 7-10 years to their customers, their limited partners.
Venture capitalists have money, but very soon into their jobs, they realize how important and constrained their time is, because they cannot raise another “Time Fund.” Yes, that’s obvious, but worth underlining. It’s their job to take meetings, develop relationships, read about their industries, and evaluate potential investments. And, it’s their job to say “no.” Many former operators in venture find this shift — from “doing” at their companies, to saying “no” all the time — as a difficult transition, and one that makes them feel bad because they don’t want to be part of the memory of crushing another person’s dreams, and they want to maintain good relationships with everyone because one never knows where the next great company referral will come from.
As a result, unfortunately, sometimes investors don’t follow-up or deliver a “no” to an entrepreneur. They can go radio silent, hoping the person seeking their response will, over time, get the hint. This affords them the ability to avoid an awkward conversation. They may also not want to engage further, give feedback over email, and so on in order to preserve their time and keep focus. Delivering a “no” on the phone can seem impersonal, as you can’t read body language. Delivering a “no” in person is potentially more awkward. Of course, not everyone is like this. Some people will say “no” before any meeting is scheduled, or right there in the meeting. it’s just a matter of personality and style.
It’s easy to sit back and say “Hey, investors should have the guts to say ‘no.” I personally agree with that, but I have also come to understand the many legitimate reasons others let these things slide. They may just be this way personally. They may not want to ruin a relationship. They may not be able to convey their thoughts truthfully. They may be buried in email. All of these aren’t excuses for basic professional decency, but one must also consider the pace of referrals, emails, and pitches these folks withstand, not to mention the attention they must pay to their current investments to make sure that they at least get acquired or turn into real independent companies.
Receiving A “No”
Fortunately for you — and unfortunately for me — I am expert on this topic 🙂 One day, hopefully, I will get the chance to share with you the amount of “no’s” I’ve received over the last three years. At first, you think it’s all numbers, so you just carry along. After a while, it feels systemic, and then it feels cruel, like people are conspiring against you. Then, there’s a second wave, and you realize it’s a numbers game again. Or, so you hope.
Here are some things I’ve personally learned in receiving a metric tonne of “no’s.” I don’t want to be prescriptive here and say you should think and act like I do, so I’ll just lay out my own reasoning, and leave it to you to agree or disagree:
- Unless I spend a good deal of time with someone about something like a job opportunity or potential investment, I don’t expect to hear back from them. I do not take this personally, but I also pay attention to if and how a person follows up and it always makes an impression on me.
- I try to act in a manner how I’d like to be treated, but I don’t expect that of others. I also make mistakes, sometimes disregard cold emails, and will let a conversation trail on email to avoid going deeper. It happens to me, and I don’t mind doing that.
- If I’m able to receive a “no,” I rarely ask for feedback unless the other person offers it. In most cases, there’s little incentive for the other party to really share why they’re saying “no.” So, I just let it go.
- I always try my best to be gracious. This took time to learn. I wasn’t always this way. Looking back, it’s a bit embarrassing. Today, if someone is gracious enough to say “no” politely and genuinely, I also try to be gracious back to them, to thank them for their time, their interest, and oddly enough, I’ve actually made some really good friends from those types of discussions.