Maximizing the Gain from VC's Rejection
Even when VCs say no, there can be silver linings in the situation.
So, the investor (or, more accurately, "potential investor" or even more accurately "unrealized investor") has rejected your proposal. Sometimes this can be done rather gracefully (as outlined in this guide: https://www.signatureblock.co/articles/how-to-say-no-a-guide-to-passing). I'm referring only to the situation when you've received a verbal or written message that a VC is not ready to invest in your company for some reasons. If your cold email with an inspiring presentation remains unanswered, this cannot be considered a full-fledged rejection. Don't delude yourself; no response is worse than a rejection.
Surprised? It's simple. You receive a rejection within the framework of communication, which, at the very least, indicates that the investor initially engaged with you. And this gives you the right to subsequent steps. However, if you received nothing, you're in the realm of what's called "Schrodinger's Rejection".
We can't be sure if you've been told "No", but we certainly know that you weren't told "Yes".
After a rejection, you certainly shouldn't give up. Here are five straightforward tips on how to maximize the situation:
Don't try to convince. Specifically, don't argue that the investor misunderstood or misjudged something. Venture investments are based on making subjective decisions. By trying to convince, you're not demonstrating your startup's advantages, but rather proving the investor is wrong. This is unlikely to be appreciated.
Don't break communication. Even if the investor, as it seems to you, wasn't polite in communication and didn't respond thoroughly. Thank them for their attention and try to maintain this contact for the future. By writing a sharp comment, you might get immediate satisfaction, but most likely, you'll lose in the long run.
Try to find out the real reasons for the rejection. Investors often like to sugarcoat bad news with a "sandwich" of positive comments. Most likely, if you were genuinely considered for investment, you were "not good enough". Find out exactly by what criteria you fell short.
If the investor does not indicate assessment parameters, but refers to the fact that you are not suitable for them specifically - ask them to suggest, or better introduce you to those investors who match your profile. If you didn't receive a "sandwich" and you're genuinely good, such contacts occur quite often. Personally, I always do this with interesting startups.
If you fall short on parameters - don't just find out the scale of measurement (most often, they will tell you about MRR/ARR), but also get agreement on sending updates about progress and/or the right to return when the expected result is achieved.
A tuft of hair from a mangy mare. This wisdom is about gaining advantage even when the outcome is not maximal. Be wise!