When I say no, I usually say this it not for me or I just don’t see how this is going to scale, but I always give a reason and some feedback which they can take or leave.
By Joanne Wilson (Blogger & Angel Investor, Gotham Gal)
I am an angel investor. I invest in entrepreneurs who have taken their idea, built it, and shown some proof that there is a market for what they have created. I am engaged with the companies that I invest in. I make these investments my full time job. I do everything I can to help them grow. I am also brutally honest.
I have met with countless entrepreneurs over the past 5 years, actually past 25 but in the past 5 they are having face to faces with me. I have made a commitment (some of the deals have yet to close) to over 30 companies. I have said no countless times. When I say no, I usually say this it not for me or I just don’t see how this is going to scale, but I always give a reason and some feedback which they can take or leave. That is what no looks like.
As I help the companies I am involved with as well as others that I might just give advice to, I also want them to understand what no looks like. When you pitch a VC or person and they spend an hour engaging you about your business that does not mean yes. When they tell you that they are interested in what you are doing and want to keep in touch, that does not mean yes. When you leave and they say to keep in touch as you raise a round, that does not mean yes. When you try to get in touch a few weeks later to tell them where are you and they never email you back or return your call, that means no They might not feel comfortable just saying “no, this is not what we invest in, we don’t think this is scaleable, we don’t even understand the idea, we are glad we met you but the answer is no”.
Here is what YES means. You go meet someone and their eyes light up and they ask you back to meet with his/her partners and schedule a date. When the hour meeting turns into two. When they start talking real numbers, when they say they are interested in doing some diligence. That means you have a really great shot of having that person/company invest in you.
As an entrepreneur when you grow your business and it morphs over time you spend a lot of time reading between the lines and listening to the market. Use those skills when you go ask for cash. It isn’t fun raising money but it can be a lot more productive when you read through the lines and push for real answers. If you aren’t sure, there is nothing wrong with saying “should I take that as a no”?
This post was originally posted at Gotham Gal.
About the guest blogger: Joanne Wilson is an advisor and investor in startups, including Curbed (Eater/Racked), Food52, Red Stamp, Catchafire, DailyWorth, Editd, Ricks Picks, Cacao Pietro, Editions 01, Hot Bread Kitchen, Nest.io, Gotham Gym, The Moon Group and MOUSE. Her most successful venture is being married to her best friend Fred and raising her three kids, Jessica, Emily and Josh. Joanne blogs under the name Gotham Gal. Follow her on Twitter at @thegothamgal.