Venture capital · Fundraising

How do you keep your relationship going with an investor who rejected you?

Lucas Jaz

June 27th, 2016

Most investors don't give you money for a pitch, yet your relationship with them can still go on or be built. I'd argue it's important to keep a relationship going, both so that you can come back to them when things have progressed and/or if you build something else. I'd love to hear how other founders have nurtured "Nos" into relationship - both your immediate response and how you've kept in touch.  Please only respond if you've done - no speculation.

Peter Weiss President at American Outlook, Inc.

June 27th, 2016

If you can, inquire about why they're passing.  Sometimes the timing is wrong; sometimes they're interested but have a concern about whether you'll be able to accomplish something or overcome a particular obstacle.

Begin by asking if they know anyone else who might be interested.  Then ask if it's OK if you stay in touch or, alternatively, just add them to your e-mail update list (and remove them if they ask).  If you are having an open-house, release party, etc. invite them.

It's never a bad move to call or e-mail once in a while with a follow-up question about something that was said during your conversation or something they may know about.  

I've been working with young companies for nearly twenty years and learned I never know when something good will come up unexpectedly.  This can include an introduction to a customer/vendor/investor; a check in a later round from someone who passed earlier; or even a bit of insightful help or advice.  

David Evans Fractional CTO and Investor

June 28th, 2016

Like Peter mentioned, absolutely ask for permission to follow up.  As an investor, if I am passing because you're too early stage or there is a key flaw in your model, but I have interest, I may want an update when you are farther along the curve or have resolved that key issue.  If I am passing because I don't know the space, then the likelihood is small I'd want a follow up.

It's a lot like prospecting in sales,  Ask for permission and give them a reason why you want to follow up.

Thomas Kaled Business Development Consultant @ thomas.kaled@gmail.com

June 27th, 2016

I agree with @PeterWeiss and would add if they choose not to answer any of your questions about why they chose not to invest it is best not to add them into your funnel. Identifying suspects is easy-you can use anything from yellow pages (not recommended obviously but to the point) to personal introduction with recommendation however if it is improbable that they will ever become a prospect don't waste resources and time is your most precious one.

Marcia Allen Founder and COO BioTech Solutions Enterprise Group, Ltd, LLC

June 28th, 2016

why would you want to?  Finding investors is like dating and finding a life partner.  If it's not a fit, it's not a fit.  If they didn't A. See the vision you have and want to get involved or B. give you homework and ask you to get back in touch, I recommend you move on.  There are many more fish in the sea.

Nathan Beckord

June 28th, 2016

I agree with Marcia-- fundraising is not like traditional sales, where you can often "win over" a lead with enough persistence. Once an investor says no, it's extraordinarily unlikely they will come around later (unless you can demonstrate Snapchat-like growth, in which case they'll be calling you-- and thus no need to nurture the relationship :)

It takes time and energy to build any relationship, and as a founder your time is better spent getting cycles with folks who are still prospects, or at a minimum have given you a "not right now."

I also agree with others' comments about periodically sending a progress update. As the cliche goes, "VCs invest in a line, not a dot" so showing you can regularly and consistently execute is a good thing.

To that end, we just-- like last week-- released a new tool in Foundersuite.com called "Investor Updater" which helps build simple progress reports. You can see an example here



Tom Justin CEO at Center Mass Communications, LLC

June 27th, 2016

Some years ago I was heading up a hotel casino project for Las Vegas. It was a $1.5 billion dollar deal. Our smaller investors would be in the $50 - $100 million dollar range. The head of one group and I got along great. Even though they turned it down (it was so close) he and I stayed in touch. We didn't talk a lot of business but he always asked how it was going. He brought me two potential investors on a casual introduction and wanted nothing in return if they came aboard. He was technically prohibited from even doing that.