What “No” Sounds Like

What “No” Sounds Like

Talking to another seed investor recently, we both got something of a chuckle when discussing a startup that had approached each of us separately.  The chuckle was all about this team’s deaf ear to what was really being said to them.  The word “No” comes out in a variety of ways when talking to investors – but rarely, if ever, does it come out as a straight no.  No one likes to let down a startup.  No one will ever tell you your baby is ugly.  But, geez, life would be a whole lot easier if they did.

I’m not necessarily talking about investment refusals.  Those are usually pretty clear even if not straightforward.  You either get money or you don’t.  But I am talking about discussions with prospective investors, partners and other interested persons where there is disguised disagreement about things like demand for the innovation, market size or selection, growth projections, valuation, exit potential, etc.  Your prospective investors may not be expert on any of that, but they can let their money do their talking.  If they appear disinterested, are they providing feedback without saying anything?  Are they not bothering to engage in a debate because they don’t intend to invest?

There is another angle here – are you presenting things to an investor from your personal perspective or from a market perspective.  In yet another recent conversation with a fellow investor, I was given this gem:  “Don’t say ‘I think….’”  I think the market is $1.5B!  I think we fit well in this specific market!  I think so-and-so will buy us!  The “I think…” trap is an easy one to fall in to.  Avoid it by citing customer feedback, objective facts and independent research.

Be open to the feedback your investment prospects are providing you.  Approach each call or meeting or pitch as an opportunity to learn something new.  It could be something new like how others view your innovation; or how others view your business acumen; or how others view you as a person.  But, whatever its, recognize it as valuable and actionable feedback.

Be open to understanding how people say “No.”  It may not be a direct “No.”  In fact, it may even be a “Maybe.”  But, whatever it is recognize it for what it is – invaluable feedback.

This is why at WKI we emphasize the design of your approach to every facet of your business.  Design your investor approach – take the “I think” out and put the “We’ve designed…” in.

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