What To Do When An Investor Says No

Expect to take multiple meetings before landing an investor. As a founder, you have to treat the fundraising process much like the sales process.

You are prepared to pitch. You’ve done your research, properly prepared financials and perfected your presentation. Most importantly, you’ve landed a coveted meeting with an investor. But after the meeting, the investor passes on your idea.

What do you do?

I work with entrepreneurs regularly to prepare them for fundraising. It’s not just about a good elevator pitch. When it comes time to meet with an investor,

Founders should ensure:

  • the pitch deck is clear and succinct;
  • proper financial statements are assembled;
  • they can speak competently and confidently about the future of their business.

But even with best preparations and a killer investment pitch, you may not be able to convince an investor to buy in.

There are a number of reasons why investors say no. For example:

  • your offering may not align with their investment thesis;
  • you are entering a saturated market; or
  • they simply don’t believe in your idea.

It happens. Don’t panic. Rather, prepare for this very scenario. Take the following principles into consideration before you pitch your business to investors.


Remember, it’s not personal

You poured your heart and soul (and bank account) into your idea. It’s okay if you experience some shock when someone says they’re not interested. Keep your cool. Take a moment, breathe in and offer up thanks for their time.

Photo: YFS Magazine

Don’t question the investor’s intentions or their know-how. Is it really worth burning a bridge? Of course not. Just about everyone who works in the venture capital space has at least one cautionary tale about a founder who let their emotions get the better of them in a pitch meeting.


Ask the right questions

Once you regain your bearings, take a moment to ask a few questions and gain insight on why they passed on your idea. Prepare these questions ahead of time. Dive into any points that the investor presents that are still unclear to you.

Unfortunately, you won’t have much time for an intensive Q&A session. Instead, think on your feet and ask the important questions first. Clarity can help going forward.


Request referrals

Even if your offering was not ideal for one investor, that does not necessarily rule out other potential investors. The venture capital community is close knit. Don’t be afraid to ask for a warm introduction to another potential investor that could be a better fit.

Photo: © ASjack, YFS Magazine


Keep your head up

Don’t stay down for long. Get back to the drawing board. Make adjustments. Sit down with mentors, co-founders and advisors. Take time to review all of the feedback you received from your pitch meeting.

Ultimately, expect to take multiple meetings before landing an investor. As a founder, you have to treat the fundraising process much like the sales process. After all, you are selling part of your company to potential investors. And any salesperson worth their salt will tell you have you have to hear a lot of “no’s” before you’ll get a single “yes.”


This article has been edited.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, an outsourced financial services firm that provides early-stage companies with day-to-day transactional accounting, CFO service, tax, and valuation services and support. He’s a financial expert and startup mentor whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.


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