Why Your VC Said No and How to Get a Yes | Be Uniic

Startup founders will spend hours and hours on calls with venture capitalists. You’ll soon realize that fundraising is a full-time role in and of itself. You have to develop and share your company’s vision, growth potential, and strategic plans, only to get told “no thanks” at the end of your outreach. If this is you, then you’d know that it’s disheartening. It’s tempting to just ask “why,” to find out what went wrong, but the truth of the matter is that often the “no” isn’t about what’s wrong with your business. It’s that there is another company (or two, or a few) that simply seemed like a better investment at the time.

Now, we know this sounds like some sort of wake up call, but it isn’t. It doesn’t mean your business isn’t worth or that the VC didn’t see potential. On another day, or under slightly different circumstances, you might have heard a “yes.” The decision comes down to timing and relative opportunities. Investors constantly compare startups – that’s what an associate is for. They spend countless hours evaluating cost vs. upside, the risk vs. reward. Sometimes, the competitor edges you out – not because you lack value, but because they appear to offer slightly more at the moment.

Keep Improving

Don’t cry yourself to sleep since you got rejected. We know it feels like Junior Year Prom, but you should take this opportunity to shift your focus on how you can make your business better. When you do this, your business will be a no-brainer for VCs.

• Tighten Your Financials: When a VC reviews your finances, they want to make sure you have full control over them. Make sure you’re streamlining operations which will lead to you cutting unnecessary costs. Also, don’t forget to demonstrate consistent revenue growth. Show them you’re not just running a company, but building a scalable business.
• Differentiate Yourself: The main question is “why you?” Why should an investor pick you over the competition? While it might be difficult, you should attempt to make this clear. Highlight your value proposition and how your solution stands out. Whether it’s through customer traction, product innovation, or a more experienced team. Find what makes you special and push it down their throats.
• Refine Your Pitch: This is a common issue many startup founders face. They just can’t sell. Your product might be great, but you have no pitch – you’re going about selling it wrong. Practice makes perfect, and every “no” is a chance to refine your story. Make sure you address the right pain points for investors, clearly demonstrating the return they can expect, and aligning your vision with their investment goals.
• Expand Your Network: If someone tells you no, it isn’t the end of the relationship. Try to maintain communication and keep all investors updated as you progress. Meanwhile, continue networking with others who might be potential investors. The more doors you knock on, the better your chances are of finding the right person.
• Iterate and Innovate: Show you’re improving. Make sure it doesn’t seem like a one-off either. VCs love to see founders who’re adaptable and always seeking ways to innovate. Whether it’s improving your product, pivoting your business model, or updating internal processes, continuous improvement builds confidence.

A No Into a Future Yes

An investor is always juggling so many potential deals, and at another time, with different circumstances. You might be the company they say yes to and it really is so dependent on when you reach out, when you get a chance to pitch, and who else is in the pipeline. The goal is to improve your business to the point it’s the obvious choice when paired with others.

So, if a VC passes, don’t see it as an end. Keep refining, growing, and proving your business’s worth. Eventually, you’ll not only get a “yes,” but you’ll also become the kind of company that investors can’t afford to say no to.

Takeaways

Remember, rejection is a part of life and with VCs it’s no different. This rejection could just be a reflection of timing and competition, not someone spitting on your business. By working to always improve, tightening up on your pitch/selling, and building a better company, you’ll position yourself to get that coveted “yes” in the future.

Keep pushing forward, and soon enough, the investors will be the ones knocking on your door.